Meeting their Mandates?

Funding Practice Alliance The Research Report on the National Lottery Distribution Trust Fund (NLDTF) and the National Development Agency (NDA) meeting their mandates? The Research Report on the National Lottery Distribution Trust Fund (NLDTF) and the National Development Agency (NDA)

Published by the Funding Practice Alliance (FPA) c/o Inyathelo – The South African Institute for Advancement PO Box 43276 Woodstock 7915 Cape Town | South Africa Tel +27 21 465 6981 Fax +27 21 465 6953 [email protected] www.inyathelo.org.za

First published by the Funding Practice Alliance 2011 First edition with corrections © the Funding Practice Alliance ISBN 978-0-9870015-0-4

Researched and written by Saranel Benjamin-Lebert and Tom Lebert (South Development Consultancy Services) Edited by Stephen Heyns Concept design and layout Angela Tuck of HANDS-ON design studio Printing and Binding by C2 Digital Print

This book shall not, by way of trade or otherwise, be lent, resold, hired out or otherwise circulated without the publisher’s prior consent in any form of binding or cover other than in which it is published and without a similar condition including this condition being imposed on the subsequent purchaser. You are welcome to copy parts of this booklet for non-profit educational use but the Funding Practice Alliance must be acknowledged in full. Acknowledgements

The Funding Practice Alliance wishes to express its appreciation to a range of people for their support for, and participation in, this research. Firstly, we would like to extend our deep appreciation to our funders for their support, without which this research could not have taken place. FPA funding support was received from Atlantic Philanthropies, the CS Mott Foundation, the Ford Foundation, the Anglo American Chairman’s Fund, Cordaid, the Davies Foundation Trust, the Robert Niven Trust and the RB Hagart Trust. We would like to acknowledge the researchers, Saranel Benjamin-Lebert and Tom Lebert of South Development Consultancy Services, for conducting the research and writing the report. In addition, we would like to acknowledge former SCAT director Joanne Harding for her important role in the FPA partnership. We are very grateful to all the organisations, their staff, directors and CEOs, and board members who participated in this project by completing the survey questionnaires and sharing their views, experiences and insights in interviews and focus groups. In addition, a number of individuals dedicated their time to this project by participating in reference group meetings to discuss the research, and we are immensely appreciative of their guidance and input. We also acknowledge those who were unable to participate in the interview process, but nevertheless provided information and guidance in other ways.

The Funding Practice Alliance March 2011 Foreword

or many years South Africa’s civil society sector funding, funding sources and funding practices, including has largely been funded by international sources. from government departments and corporate social However, after the advent of democracy in 1994, investment funds, faith-based funding institutions, it became imperative for civil society organisations international funders and private philanthropists. To F(CSOs) to find local resources to sustain their work. The understand more fully the issues related to funding post-apartheid government proposed and developed practice, sources and sustainability, four non-profit a number of important and welcome initiatives organisations came together in 2009 as the Funding towards ensuring sources of public funding for social Practice Alliance (FPA) namely: development. This report documents the experiences • Social Change Assistance Trust (SCAT) of CSOs of two government-led interventions: 1) the • Community Development Resource Agency (CDRA) disbursement of National Lottery Distribution Trust Fund • Inyathelo – The South African Institute (NLDTF) moneys to good causes through the National for Advancement Lotteries Board (NLB); and 2) the National Development • Rural Education Access Programme (REAP) Agency (NDA). The purpose of the FPA is to conduct research into, Respondents said that their experiences of the NLB and inter alia, the size and scale of funding to CSOs; good NDA were that these agencies are overly bureaucratic, funding practices including grantmaking processes; the and that agency technocrats are playing an increasing administrative capacity of state funding agencies; state role in defining and influencing approaches to social and civil society power relations; mutual accountability development. It is apparent that civil society organisations between grantseekers and grantmakers; decision-making have not yet found effective ways to engage government processes related to funding; and the effectiveness of on issues of development and funding for development funding relationships as well as exit strategies. initiatives, despite various attempts to organise Presented here are the results of the first research project, themselves to speak as a collective. focused on whether the NLB and the NDA are meeting There is common concern in the non-profit sector their mandates with regard to CSOs and grantmaking, as about the relationship between state and civil society, defined in law, and focused on the extent to which these and about state development agency funding practice. agencies are realising their potential to address South Broad concerns have been expressed about sustainable Africa’s development challenges.

The Funding Practice Alliance James Taylor, Practitioner (CDRA) Shelagh Gastrow, Executive Director (Inyathelo) Glenda Glover, Programme Development, Research and Advocacy Manager (REAP) Anthea Davids-Thomas, Executive Director (SCAT) Acronyms

ANC African National Congress IDT independent Development Trust CAO Central Applications Office ISRDP integrated Sustainable Rural Development Programme CBO Community-based organisation NDA National Development Agency NEDLAC National Economic Development and Labour Council CDRA Community Development Resource Association NGO Non-governmental organisation CEO Chief Executive Officer NLB National Lotteries Board COO Chief Operations Officer NLDTF National Lottery Distribution Trust Fund CSO Civil society organisation NPO Non-profit organisation DA Distributing agency NYS National Youth Service DSD Department of Social Development PAJA Promotion of Administrative Justice Act DTI Department of Trade and Industry PBO Public benefit organisation PGDS Provincial Growth and Development Strategy EPWP expanded Public Works Programme PSC Public Service Commission EU european Union RDP reconstruction and Development Programme FPA Funding Practice Alliance REAP rural Education Assistance Programme GDP gross Domestic Product SAEP south African Education and Environment Project GEAR growth Employment and Redistribution SANGOCO south African NGO Coalition (macroeconomic policy) SARS south African Revenue Service HDI human Development Index SCAT social Change Assistance Trust IDP integrated development plan TNDT Transitional National Development Trust MEETING THEIR MANDATES? Summary Executive

T Fund (NLDTF)fordistributiontosociallyworthyprojects. of moneys held in the National Lottery Distribution Trust 2) thedistribution by theNational Lotteries Board(NLB) practices of the National Development Agency (NDA); and ticular project was to conduct research into: 1) the funding – TheSouth African velopment ResourceAssociation Inyathelo and (CDR A) 1 how theseproblemsmightbe addressed. grantmaking function, and makes recommendations on the keyproblems associated with the NDAandNLB’s in the research project. The research reporthighlights not take place because the NDA refusedto participate could Board NDA the of members and staff current with tional Lottery funds to socially worthy projects. on erature theNDAand the distribution by theNLB of Na a total of 35 CSOs.Thedocument also existing reviews lit- with provinces five in held were discussions group focus four former NDA Boardmembers;and 20 CSOs.eparate who work for the NLB or its distributing agencies (DAs); search process that included interviews with six people write areportonitsfindings. cy these viewsdocumented. portunity to sharetheirfor CSOsexperiences,andtohave analysis. The project was also intended to provide an op mulate strategic actions informed by sound research and tribution of National Lottery funds so that CSOs can for- qualitative and quantitative data on the NDA and the dis- ervices wascontracted Services to conduct the research and worthy projects. National Lottery whichare earmarkedfordistribution tosocially National Lotteries Board.Itistherepository oftheproceeds The NLDTFvests in,isadministered, andisheldintrustby the This report presents the findings of a year-long re ayear-long of findings the presents report This The main aim of the research was to gather rigorous Assistance Programme (REAP),Community De - Change Assistance Trust (SCAT), RuralEducation four civil society organisations (CSOs) – the he Funding Practice Alliance (FPA) comprises Institute for Advancement. This par- South Development Consultan Interviews Social

1 - - - -

been catastrophic, with some CSOs having to retrench has inefficiency this of impact The disbursed. be to money grants have had to wait a further six to 12 months for the cessed. Those organisations which have been awarded 12 over months for applications to the NLDTF to be pro- and theNationalYouth DevelopmentAgency. state bodies such as theCommission for GenderEquality his decision to make grants from National Lottery funds to ficiently to CSOs. The Minister has not been challenged on ef- and effectively funds disburse to inability NLB’s the for National Lottery grantmaking has been held accountable The consequence has been that nobody associated with ability between the NLB, the Minister, and the three DAs. sometimes confusing lines of communication and account making surethatitsgrantmakingwouldworkwell. the National little consideration Lottery, very went into while considerable thought went into the gaming side of its disbursement of National Lottery funds. that the NLB has been plagued with problems in respect of confirms project research This category. ‘miscellaneous’ the – category fifth a in distribution for earmarked funds and the NLB, has the power to make grants from Lottery dustry, acting in consultation with the Minister of Finance in the last three categories. The Minister of Tradeand vision for distributing agencies to adjudicate applications and no allocation has beenever made.TheAct makes pro- Programme (RDP). ister responsible forthe development fundsto were beadministeredby the Min arts, culture and national heritage. tion and development; charities; sport and recreation; and to socially worthy projects in four categories: reconstruc funds held in the NLDTF must be allocated and disbursed According to the LotteriesAct57of 1997, National Lottery The NationalLotteriesBoardandtheNLDTF Interviews with CSOs indicate that it sometimes takes NLB grantmaking has been riddled with ineffective and However, the Ministry no longer exists Reconstruction and Development Reconstruction and It isclearthat, In- - - - staff or close. The NLDTF has disbursed less than 50% of applications and disbursing funds in this case – must there- the available funds in each of the last three years. fore be discharged within reasonable timeframes. Delays experienced with disbursement of grants have Since the judgment was made, the NLB has begun to been attributed to high staff turnover, a lack of trained change the way it disburses funds, such as setting time- staff in the NLB’s Central Applications Office (CAO) which frames for the screening, processing and adjudicating of screens and processes applications, and an inefficient applications and disbursement of funds. There have also processing system. In many cases applications have been been changes within the Central Applications Office to lost and inconsistent criteria have been applied to both streamline the application process. Although these chang- successful and unsuccessful applicants. Because the NLB es are filtering down to the staff of the CAO, more needs operates on a first come-first served basis, organisations to be done for the Office to become efficient in respect of whose documents have been lost find that their resub- processing applications, including staff training and reduc- mitted applications end up at the back of the queue. An ing staff turnover. The adjudication of applications should exacerbating factor has been the lack of dedicated NLB also be made much more efficient and suggestions have support staff for such grantmaking functions as drawing been made that members of the DAs should be given full- up contracts, payments to grantees, and monitoring com- time appointments in order to deal with the current back- pliance with agreements. A further problem is the lack of log and overcome this bottleneck in the system. co-ordination between the DAs and the NLB in respect of The Department of Trade and Industry (DTI) is current- processing contracts and payments, meaning long delays ly drafting amendments to the Lotteries Act to improve in grant disbursements to CSOs. National Lottery grantmaking. The NLB has made propos- The judgment in the SAEP and Another v National Lot- als for strengthening the lines of accountability in respect teries Board and Others case2 (which has been appealed by of National Lottery funds. Another proposed legislative the NLB) has been welcomed in that it clarifies the lines of amendment being debated in the Ministry of Trade and accountability between the NLB, the DAs and the Minister. Industry and the NLB is the notion of a state-run lottery. A The judge has determined that that: 1) the DAs are commit- state-run lottery could have a crippling impact on civil so- tees of the NLB, appointed by the Minister, they are not ciety in South Africa where CSOs have struggled to survive independent entities; 2) only the Minister and his or her in the face of significant shifts in funding over the last 15 Cabinet colleagues have the power to determine rules for years. The NDA and the National Lottery were established grants; 3) the powers of the DAs are limited to receiving on the premise that a strong, capable civil society sector and considering applications, and suggesting conditions to would be able to assist the state in achieving its poverty be imposed when money is granted; and 4) applications alleviation objectives. With the NDA failing to deliver on its for funding to the NLB and the DAs constitute ‘adminis- mandate to provide funding effectively to CSOs, and with trative action’ in terms of the Promotion of Administra- the private sector focusing on service delivery with BEE tive Justice Act (PAJA). Administrative action – processing [black economic empowerment] points, the creation of a state lottery may divert much-needed funds away from CSOs. 2 South African Education and Environment Project and Another v National Lotteries Board and Others, Western Cape High Court, case 22352/2009 [2010] ZAWCHC 220 (26 August 2010). MEETING THEIR MANDATES? of NDA grants are small CBOs orprojects that may not beneficiaries the as recipients grant some for problems sums ofmoneyorganisations.to fewer This has created increased. This suggests that the NDA is giving larger and 2007/08 59inbut2008/09, the total amount granted in to 78in from 104inand952006/07 decreased 2005/06 beneficiaries of number The funds. available of 62% only burse funds. Between 2003andthe 2008, NDA disbursed dis- effectively to failed has NDA the grantmaking, on ily the agencyfromsomesectorsofcivilsociety. ment has cost the NDA its independence and distanced Department of Social Development (DSD). Thisalign mental policies and programmes including those of the Its grantmaking criteria have been based on key govern- aligned itself with the state’s poverty alleviation agenda. poverty alleviation strategies, isthat the Agency has fully effective on discourse including society, civil and state failure to facilitate building a relationship between the competition withthoseofthecivilsocietysector. own operational programmes that are, in some cases, in its up setting and instead, beneficiaries as projects and NGOs, favouring community-based organisations (CBOs) in its own grantmaking practice, the NDA marginalised ing relations between the state and civil society. Further, Agency chose to focus on grantmaking rather than build the NDA’s mandate was too broad to begin with, and the sultation and dialogue. A keyreason for this failure is that lations between the state and civil society through con CSOs forpovertyalleviation activities; and 2)building re meet itsmandate in respect of: 1) disbursing funds to in respect ofthe NDAisthat the Agency has failed to The central concern that has emerged from this research The NationalDevelopmentAgency Despite streamlining its interventions to focus primar- NDA’s the for offered be can that reason Another - - - - society. dence; 5)funding practice; and 6) engagement with civil transparency and accountability; 4) institutional indepen functions; 2) administrative processes; 3)governance, dations in respect of: 1) administrative structure and to beingheldaccountable,especiallybycivilsociety. impression of alack of openness and,further,resistance the confirms project research this in participate to fusal making role in a fair and equitable manner. The NDA’s re calls into question whether theAgency is using its grant available on the NDA website or in its annual reports. This ries and no details of funds disbursed havebeen made extends to beneficiaries. No complete list of its beneficia responsible. This lack of accountability and transparency but senior managementheld never and theBoardwere an NDA accounts for thetheft clerk ofover to account. casions, but senior management has been never called has been accused of corruption and fraudonoc several It been. have grants of recipients the who identified or has not accounted effectively for how it distributes funds have been shrouded by a veil of secrecy, and the Agency of accountability and transparency. The NDA’s activities society. a lack of commitment to building and strengthening civil to developmentandpovertyalleviation. lacks appreciation of civil society’s potential contribution vincial administrations. This suggests that government this purpose in some government departments and pro- alleviation projects is lessthan the amount allocated for been the fact that the NDA’s annual budget for poverty large-scale projects for theNDA.More worrying has have the necessary skillsand resourcesto implement The reportconcludes with a number of recommen Another key areaof concern has been the NDA’s lack In 2006,criminallaidagainst charges were It furthersignals 8 million, R8 ------Contents 1 introduction 2 2 Methodology and limitations 4 2.1 Methodology for the NLB research process 4 2.2 Methodology and limitations of the NDA research process 5 2.3 Methodology and limitations of civil society research 8 3 south Africa’s poverty alleviation framework: From welfare to development 13 3.1 Political and economic context 13 3.2 The state’s approach to poverty 14 3.3 The state’s poverty reduction programmes 16 3.4 state-civil society relations 18 4 The National Lotteries Board and the NLDTF 23 4.1 Background and context 23 4.2 Legislative mandate 24 4.3 structure and function of the National Lottery 30 4.4 Grantmaking 44 4.5 Civil society’s experiences of the NLB 62 4.6 Concluding comments 75 5 The National Development Agency 76 5.1 Background and context 76 5.2 Legislative mandate 80 5.3 structure and governance of the NDA 85 5.4 strategic vision of the NDA 94 5.5 Disbursement and expenditure of funds 100 5.6 Civil society’s experience of the NDA 105 5.7 Concluding comments 117 6 Findings and concluding comments 118 6.1 Findings 119 6.2 Concluding comments 123 7 References 125 Appendices 129 Appendix 1: A chronology of communication with NDA 129 Appendix 2: List of interviews and focus group discussions 132 2 MEETING THEIR MANDATES? 1 Introduction S source Association and Inyathelo –The South African Assistance Programme, Community Development NDA and theNLB. lective advocacy initiatives to address the failings of the col formulate to evidence sufficient, research-based had gies and functioning. At the same time, CSOs havenot strate- their improve to order in practice their on reflect that these institutions have not had much opportunity to that havetendedtomarginaliseCSOs. ruption, and bureaucratic grant application procedures ciencies in the disbursement of funds, allegations of cor- ineffi by characterised been have institutions state two – the collective withtheNDAandNLB. yet hadthe opportunity to share theirexperiences as a some received attention in the media,but CSOs havenot from these institutions in the face of massive needshave 5 4 3 as part of a wider development agenda. tablished for grantmaking to civilsociety organisations administered by the National Lotteries es- Board, were Agency, and the National Lottery Distribution Trust Fund of thesespecial funds, namely the National Development for thepurpose of making investments and loans. Two The relative newness of the NDA and NLB has meant The Funding Practice Alliance comprises four CSOs Orchestra intheother. acting withSikhula Sonke inone,andthe JohannesburgFestival the SouthAfrican Education andnvironmentProject (SAEP) Althoughtwo court casesagainst theNLBhavebeenfinalised: worthy projects. National Lotterywhichareearmarked fordistributiontosocially tional LotteriesBoard.Itistherepositoryofproceeds of the TheNLDTFvests in,isadministered, and isheldintrustbytheNa Swilling&Van Breda 2006:77. Social Change Assistance Trust, opment. tutions to alleviate povertyand facilitate devel lished approximately 14‘special funds’ and insti outh Africa’s post-1994 government has estab 3 Someofthesefunds havebeensetup 5 Frustrations around accessing funding 4 Rural Education

However, these Re ------1. The objectivesoftheresearchwere: the researchandwriteareportonitsfindings. lopment Consultancy ces, and to have these views documented. provide an opportunity for CSOs to share their experien- research and analysis. The project was also intended to CSOs can formulate strategic actions informed bysound distribution of National Lottery funds by theNLBsothat qualitative and quantitative data on the NDA and the to sociallyworthyprojects. National Lottery Distribution Trust Fund for distribution by the National Lotteries Board of moneys held in the National Development Agency; and 2)thedistribution conduct research into: 1) the funding practices of the Institute for Advancement.This particular project was to 2.

The main aim of the research was to gather rigorous their beneficiaries. advancing their objectives and meeting the needs of contributes, or not, to development, and to CSOs experiences of the NLB and the NDA and how this on evidence. Thefocus here wason capturing NGO ing relationships with the NDA and the NLB, based To investigate civil society’s experience of fund how theserelatetotheoriesofdevelopment. whichder the NDA and the NLB are constituted and lished to do. This included an analysis of the Acts un these agencies have donewhatestab they were NLB and the NDA and assess the extent to which To and review interpretthe legal mandates of the ervices was contracted to conduct Services was contracted toconduct South Deve- - - - 3. To investigate the expectations the NDA and the This report presents the findings of a year-long research NLB have of beneficiary organisations in terms of process that included a CSO survey questionnaire; inter- relationship, compliance and impact, and the extent views with six people who work for the NLB or its distri- to which these expectations inform their existing buting agencies; interviews with four former NDA Board funding approach and practice. members; and interviews with 20 CSOs. Separate focus group discussions were held in five provinces with a total 4. To collect quantitative information on the NLB and of 35 CSOs. The document also reviews existing literature NDA in terms of funding criteria, compliance and rea- on the NDA and the distribution by the NLB of National sons for non-compliance, funding allocation trends, Lottery funds to socially worthy projects. Interviews with and the length of time it takes them to respond to current staff and members of the NDA Board could not applications, make payments, and respond to que- take place because the NDA refused to participate in the ries and appeals. research project. The research report highlights the key 5. To investigate the composition of the boards of the problems associated with the NDA and the NLB’s grant- two agencies, including the skills and background of making function, and makes recommendations on how board members and the participation of civil soci- these problems might be addressed. ety in setting up these boards; and to look into the The report has five parts. The first introduces the functioning of these boards, including payments to study. The second explains the research methodology as board members, rotation of board members, and the well as the difficulties experienced in the research pro- accountability of these boards to the state and civil cess and how these impacted on the results. Chapter 3 society. provides some background to the establishment of the two grantmaking institutions under study by examining 6. To investigate international best practices of govern- the development framework for poverty alleviation in ment funding agencies and lotteries in order to for- South Africa. Chapters 4 and 5 examine the NLB and NDA mulate recommendations that are appropriate for respectively: their legal mandates, structures and gover- the South African context. nance, and grantmaking. Both chapters document the 7. To make recommendations to the NLB and NDA, experiences that CSOs have had of the funding practices based on a body of learning and evidence, which can of these institutions. Chapter 6 provides a summary of be used to inform improved funding practice and the key issues with concluding comments. development of improved legislation, if appropriate.

3 2 he research process was made up of three parts These findings were combined with findings from the Methodology that focused on the funding practices of the civil society research process to form the basis of inter- and NDA and the NLB and how their funding prac- views that were subsequently conducted with the staff limitations tices have been experienced by CSOs. Different and Board of the National Lottery. Interviews were con- Tmethodologies were used to extract data, and each had ducted with: its limitations. • Prof. Vevek Ram, Chief Executive Officer of the NLB. 2.1 Methodology for the • Jeffrey du Preez, Chief Operations Officer of the NLB nlB research process and head of its Central Applications Office. Dr Teboho Maitse, Chairperson of the Distributing The NLB report was drawn from a review of existing • Agency for Charities. literature on the National Lottery which included the Board’s annual reports from 2000 to 2009, minutes from • Gideon Sam, Chairperson of the Distributing Agency parliamentary committee briefings, media reports and for Sports and Recreation. research reports that documented the grantmaking ac- • Prof. Dorcas Jafta, Chairperson of the Distributing tivities of the NLB since 2000. Agency for Arts, Culture and National Heritage. The key findings of the literature review were: • Zodwa Ntuli, the Minister’s nominee on the NLB. 1. There are flaws in the legislation that have a direct An interview was also scheduled to take place with the impact on the structure and functioning of the grant- Chairperson of the NLB, Prof. Alfred Nevhutanda, but making aspect of the NLB. unfortunately he cancelled on the day the interview was scheduled to take place. 2. There are structural problems in the NLB that affect The research team acknowledges the co-operation governance, accountability and functioning in re- and openness exhibited by the NLB and Chairs of the DAs spect of grant disbursements. towards this research project and expresses its appre- 3. internal processes for managing, processing and ad- ciation for their participation, which helped to produce a ? judicating grant applications as well as for disbursing rich and comprehensive research report. funds are ineffective and inefficient, resulting in- un reasonable delays. ES MANDAT T HEIR T I N G M EE

4 2.2 Methodology and limitations of the NDA research process The basis of reporting on the NDA was a literature review 4. The NDA lacks transparency and there are no effec- which included the founding legislation, NDA annual re- tive accountability mechanisms either to the state or ports from 2005 to 20096 and NDA strategic plans from to the public. The Agency has withheld information 2006 to 2011, media reports, minutes of parliamentary about its research activities and no detailed accounts portfolio committee briefings, and research reports that of grantmaking or beneficiaries have been made documented the work of the NDA since 2001. available. The key findings from the literature review were that: 5. The Agency has been unable to disburse funds ad- equately and its funding practices cannot be de- 1. The legislative mandate of the NDA, namely to facili- scribed as developmental. The impact of its funding tate dialogue and partnership between the state and on poverty alleviation is therefore in question. CSOs and to include civil society in the determination of a common understanding of development and 6. its budget has been less than the poverty alleviation poverty, has not been met. component of provincial government departments and other state-run institutions, calling into question 2. There has been such a close alignment between the government’s commitment to the NDA. funding strategy of the NDA and the development strategy of the state that it could be said that the These key findings, together with the findings from the Agency’s independence is in question. civil society research process, were intended to form the basis for engagement with the staff and Board of 3. governance within the NDA is weak, and allegations the NDA in what was envisaged to be a solution-driven of fraud and corruption have been made since the conversation. However, the NDA Board decided not to early days of the Agency. participate in the research. The ultimately unsuccessful process of trying to secure NDA participation is briefly outlined in Box 1 on the next page.

6 Reports for the period 2001 to 2004 were not available on the NDA’s website.

5 6 MEETING THEIR MANDATES? unsuccessful attemptto Box 1:Thesustainedbut secure theparticipation of theNDA

7 be engaging directly with the NDA. Mayekiso. Ms Manong said theresearchteamought to response from Bishop was received Mpumlwana and Ms Thokozile Mayekiso, Marcia Manong and No David Adler. These included the Chairperson, Bishop Mpumlwana, represent civil society approachedwere for an interview. search, currentBoardmemberswho have amandate to Despite the NDA’s decision not to participate in the re still servingontheNDABoardattime. and e-mail follow ups, no meeting materialised.Atthesametime,ever the researchteamwasin contact with people who were the FPA and the research team and that her office would be in contact to set up such a meeting. Despite several telephone calls e-mail requesting an opportunity to meet with her to explain the FPA project. encouraged the FPA to try to re-engage with the CEO of the NDA. During but received. subsequent no response waseverconversations with the Ministry of project, research the explain to a meeting requesting Mpumlwana, Bishop Board, NDA the of Chairperson the to letter official Atthe end of or explanation has beendespitearesearchteam provided requestto the COO. sent an e-mail up stating telephone that calls and the the NDA COO had decided not to participate in the research. No reason the NDA until the letter had been Amonth received. later the research team sent e-mails several and made a number of follow- a message received tosaythatand the NDAwasaboutregarding requestteamnot to sendalettercontact wouldbetheone to brieftheC EO. Fourdayslater,theresearchteam project forinterviews.HesaidtheCOO and therequest research on the Issel Rashida (COO) Officer Operating Chief brief to about was he that revealed later days five Ewang Prof. to the research team’s request, but that he was about to brief the new CEO about the FPA’s research.Afollow-up telephone call Prof. mid-July, In Ewang. Prof. namely NDA, the with contact of point first the was who person the to back go to assistant personal be processed,the research teamattempted to speak with the Chairperson of the NDA directly, only to be toldby the CEO’s the request wasbeing submitted to the NDA Board. When it seemed that the request wastaking an inordinately long time to that told was team the 2010, July in occasion one On ‘processed’. being was Board and staff NDA to access for request their initial engagement on 23 April and the end of August 2010. During that time, the research team and the FPA weretold that did two days after the meeting. 20telephone Over calls madeand were over20e-mailssent were to the NDA between the an outline of the research project’s aim, objectives, approach and ethical clearance to the NDA in writing, which the Alliance its aims, objects and approach, and request the NDA’s participation in the research project. The FPA was requested to submit Parliament’s Portfolio Committee on before appear to had she that grounds the on meeting the attending not Officer for apologies Executive her offered Chief had Issel, Rashida acting (CEO), The Manager. Grants National NDA the Mthembi, Nkensani and Development, and Research On 23 April 2010,membersof the Funding Practice Alliance and the research team met with Prof. Telephone conversation held on11 October2010. Ewang informed the research team that the NDA had appointed a new CEO, Vuyelwa Nhlapho, that she had not received 7 Social Development. The purpose of the meeting was to introduce the research project, Although Mr Adler - in your survey’. sions taken by the NDA Board not to participates [sic] view guideline poses], because obliged to refuse to answer thequestions [your inter- he subsequently declined to participate, saying ‘I am down as NDA Board member at the end of October 2010, was initially keen to be interviewed once he had stepped with theNDAappearsin 8 In October 2010 the research team sent the new CEO an E -mail sentby David Adleron8November 2010. She indicated that she was open to meeting with 8 A full account of the FPA’s engagement Social Development, the Ministry September 2010,the FPA sent an Appendix 1 Ewang, the NDA’s I am bound by the deci- . Head of The research team then approached former Board mem- having consulted with party leadership. Both agreed bers for interviews, and the following people who served to complete an e-mailed questionnaire and return it to on the NDA Board from 2003 to 2006/7 agreed: the research team within a week of the interview on • Annemarie Hendrickz. 12 October 2010. After several follow-up telephone calls and e-mails reminding them to complete the question- Dr Stephen Rule. • naire, the respondents told the research team on the • Dr Temba Masilela. 8 November 2010 that they were ‘too busy’ to complete • A respondent who wished to remain anonymous. the questionnaire. During the course of discussions held with Ms Kopane and Ms Lamoela on 12 October and 8 Because the NDA reports to Parliament’s Portfolio Com- November 2010, they expressed several opinions about mittee on Social Development, e-mails explaining the NDA presentations made to the Portfolio Committee. research project and requesting an interview were sent to every member of the Committee. In addition, the re- The NDA’s lack of co-operation with a civil society- search team liaised with the Secretary to the Committee led research process should raise alarm bells within the to have a letter from the research team placed in each sector. Questions could be asked about whether key member’s in box at Parliament. Letters and e-mails were stakeholders have been silenced, or whether this could sent to the following members: be interpreted as the Agency seeing itself as being above scrutiny and not having to account for how public funds Party Representative are spent. African National Congress Ms YR Botha Ms PP Xaba Due to the lack of co-operation from the NDA, in- Ms JW Nelson Mr VV Magagula formation on the NDA had to be sourced from other research: Gardner and Macanda 2003, media reports, and Ms JM Masilo briefings by the NDA and DSD to the Portfolio Committee Democratic Alliance Ms SP Kopane Ms H Lamoela on Social Development. In addition, the annual reports Congress of the People Ms NP Gcume and strategic plans of the NDA were consulted. However, annual reports were only available from 2005 to 2009. In- Inkatha Freedom Party Ms HN Makhuba formation available from the annual reports was limited United Democratic Movement Mr NM Kganyago to an overview of NDA governance and strategy, a Minority Front Mr RB Bhoola limited description of its achievements compared with its goals, a selection of the projects funded (not the full list African Christian Democratic Party Ms C Dudley of beneficiaries) and its financial statement. The financial statement did not include a breakdown of the funds as Of the 12 committee members, only the two members committed and disbursed to CSOs, nor was it disaggre- of the Democratic Alliance, Patricia Kopane and Helen gated according to disbursements to the provinces. The Lamoela, agreed to an interview. They were given the strategic plans of the NDA were sourced from committee interview guidelines beforehand, but on the day of meeting minutes compiled by the Parliamentary Moni- the interview they hesitated to go on record without toring Group and from DSD. 7 8 MEETING THEIR MANDATES? ticipation, 11 10 9 website. from theCivilSociety Organisation database on the NDA group discussions. The sample for thesurveywasdrawn tronic survey, a sample of in-depth interviews, and focus what, untilnow,hasbeenasignificantgap. This project aimed to document these experience and fill had in their engagements with the NDAandNLB. No existing research coverstheexperiences CSOshave 2.3 Prodder directory was Prodder also used. the survey also reached under-resourced provinces, the ment departmentsandlocalmunicipalgovernments. many corporate businesses as well as provincial govern- tails for organisations were outdated. Italso contained CBOs and well-resourced NGOs, some of the contact de- though the databasewascomprehensive, including both provinces, representing a cross-section of the sector.Al- SANGONeT, Prodder directory. sent toorganisations were surveys tal of50listedin the man rights, justice, capacity building and training. A to and Free part of networks in Northern Cape, Limpopo, North West selection of organisations with networksorwhich were tory was cumbersome to use, it was possible to make a 13 12 Various research tools were used,including an elec- To complement the NDA database and to ensure that The surveywas also placed on the websites of TheSouthernAfrican NGONetwork ( www.prodder.org.za www.nda.org.za www.bizcommunity.co.za www.civicus.org 9 of civilsocietyresearch Methodology andlimitations TheNDAdatabase lists 1 State. Theseorganisations active in were hu 12 GoogleNewsAlertsandBizcommunity. 11 the CIVCUSWorld Alliance for Citizen par - www.sangonet.org.za 10 Although this direc- 805 CSOs fromnine 805

13 ).

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research withoutpermission fromtheirdonors. National Lotteryfundsdidnotwanttoparticipateinthe were random.SomeorganisationsinreceiptofNDAor For thisreasonboththedistributionandresponses they hadappliedforNDAand/orNLDTFfundingnot. own interests. The surveywas open to all CSOs, whether that organisationswouldchoosetoparticipateintheir cessed viavariouswebsites.Theresearchteamassumed distributed, excludingthosecopiesofthesurveyac Prodder databases,approximately3 000surveyswere CDW) and the South African N GO Coalition (SANGOCO). against the simanyane Women’s SupportCentre, ActivistsNetworking Zulu-Natal NetworkAgainst Violence Against Women, Ma- Black Sash,theEastern Cape NGO Coalition, the Kwa- Community Law and the (NADCAO), Offices Advice Community of velopment School of Legal Aid Clinic (RULAC), theUniversity of Free versity Legal Aid (DDP), Karoo line, work (the national children’s Children inYezinganeDistressNetwork (CIND), Net- the surveys to their networks and e-mail address lists: disseminated viatheire-mailaddresslists. partners, namely REAP,SCAT, CDRAand It was also placed on the websites of the FPA project I A number of organisations asked to were distribute t is estimated that,togetherwiththeNDAand Groundwork, Democracy Development Programme Humanities, the National Alliance for the De- E xploitation of Child Domestic Workers (Anex Human Institutions (AULAI), DC), Rural Development Centre (CLRDC), Rights Centre, Association of Uni HIV/AIDS network),Child- Rhodes University Inyathelo, and State’s - - • Description of civil society survey After analysis, questionnaire responses were placed into The sample upon which this survey is based comprises nine categories based on the area of work, as follows: a total of 226 respondent organisations. Questionnaires • Welfare and charity including hospices, old age were received from all of nine provinces, although more homes, disability care, child care and welfare. Re- responses were received from some provinces than spondents in this category included large national others. The majority of responses came from the West- and provincial organisations and networks as well as ern Cape and Gauteng with the smallest number coming locally-based initiatives. from the Northern Cape.14 The provincial distribution of • Human rights, advice, and support including com- responses as a percentage of the total sample is indicat- munity-based paralegal and advice offices, orga- ed in figure .1 nisations that provide support to community advice offices and paralegals, and education and training in human rights at a local level. The majority of re- • Education and training (E&T) and capacity building spondents (93%) cat- including larger scale and more formalised educa- egorised themselves tion and training initiatives, universities and national as NGOs/NPOs, 4% capacity-building NGOs. described themselves • Arts, heritage, and culture including organisations as CBOs, and the bal- that work in the fields of art, music, dance, indige- ance were tertiary ed- nous languages and the environment. ucational institutions, • Local economic development (LED) and community trusts, public benefit services including organisations that implement local organisations (PBOs), economic development projects, provide local trai- or co-operatives.15 ning and capacity building for service delivery, and facilitate local development resource centres and co- operatives. Figure 1: Percentage distribution of survey by province • Advocacy and research – larger and more formalised NGOs that undertake research and advocacy in re- lation to socio-economic and human rights issues, 14 The Northern Cape is South Africa’s most sparsely populated including organisations that facilitate development province. 15 These categories are not necessarily mutually exclusive. PBOs processes at a grassroots level. are organisations that are registered as such with the South • Public interest law – organisations which provide African Revenue Service (SARS) for tax and donation purposes. free legal services or undertake impact litigation in NPOs are organisations that are registered as such with the Department of Social Development. A registered organisation furtherance of human rights. has a legal ‘personality’ of one kind or another. A trust is one • Sport – sports clubs and organisations that provide type of legal entity, a non-profit (‘Section 21’) company is support for people engaged in sport. another. An NGO or CBO could have the legal form of a trust, be registered as an NPO with DSD, and be registered as a PBO • Other – grantmaking organisations and youth groups with SARS, all at the same time. like Girl Guides and Scouts. 9 10 MEETING THEIR MANDATES? Figure 2:Areasofwork Cape (40%ineach province). organisations are based in operating in multiple provinces was similar – 80% organisations of these to respect with position The (39%). Cape tions are based either in Gauteng (43%) or in the Western organisa across national of 80% Over operating province. one than more organisations of 4% with based, are of organisations operate in the provinces in which they 19% further A 3 ). (figure nationally operate 23% and level, organisations sampled operate solely at a local or district With respect to scale of operation, 53% of the responding the totalsampleisindicatedin organisations across these categories as a percentage of across theremaining six categories. Thedistribution of cut sample the of 30% remaining The sample. the of 17% ing, and capacity building institutions make up a further and community support services. Education and train ing organisations with afocus on human rights, advice, compris 20% approximately with organisations, charity or welfare comprises (31%) sample the of third a Almost Gauteng and the Western figure 2 . - - - Figure 4: Figure 3: pend entirelyonvolunteers. de- and staff temporary or permanent no have percent end of the scale, 12% have 51 staff members or more. Two 4). At the other (figure less or 15 of complement staff a Sixty-two percent oftheorganisations in have the survey cal level. operating at national, multi-province, provincial, and lo- provinces in terms of the percentage of the total sample Figure 3 Geographical spreadandscopeofoperation Staff numbersof organisationsinthesample rvds cmaio bten h different the between comparison a provides Figure 5 shows a far greater percentage of the organisa- Organisations that had only applied to the NLB provi- tions surveyed applied to the NLB for support (81%) than ded a range of reasons for not applying to the NDA: 19% to the NDA (37%). Thirty-four percent of the sample ap- indicated that they had no knowledge of the NDA and plied to both the Lottery and the NDA. Forty-seven per- hence had not applied. Other reasons given included bad cent of the total sample had only applied to the Lottery, past experiences of the NDA, a complicated application whereas only 3% had applied solely to the NDA. Of inte- process, and difficulties in accessing application forms. rest is the fact that 16% of the organisations sampled had Some organisations were unsure of what the NDA fun- applied to neither institution. ded whilst others felt that their work did not fit in with the NDA’s funding criteria. These included environmen- tal, women’s support, educational, welfare, human rights, legal and advice organisations. One organisation felt that the NDA’s funding was not appropriate for the organisation as it was too ‘prescriptive’. Some organisa- tions that had tried to apply for NDA funding either did not receive a response or received responses they felt were rude and unhelpful. ‘I applied for NDA funding years ago...the process was cumbersome, whenever I phoned the NDA office, the staff were unavailable and when they were available they were unhelpful. As a result I never applied there again as putting Figure 5: Applications to Lottery and NDA a funding proposal together is time-consuming and I feel I don’t have time to waste. As with any other NGO we are hard pressed for staff and capacity to do the enormous Organisations that only applied to the NDA said the task we do.’ reason they did not apply to the NLB was either a bad experience with that organisation in the past, or there ‘We believed we fitted the [NDA] funding criteria. We was another, unspecified, reason. Some of the reasons could not find an application form on the NDA website and given for not applying to the Lottery included that it was e-mailed [the NDA explaining] we could not find a form on well known that the Lottery had a ‘huge backlog and de- the website and requesting information on how we could lays’ and that many applicants had never received any apply. We received an abrupt “Please consult our website acknowledgement of receipt for their proposals. Some as indicated”!’ organisations were still new and could therefore not meet the Lottery requirement that applicants must provide two years of audited financial statements.

11 12 MEETING THEIR MANDATES? 7. 6. 5. 4. 3. 2. 1. the NDAorLotteryincluding: ganisations gave other reasons for not applying to either that they had no need foradditional funding. complicated. to obtain forms saidthat the application process wastoo accessing application forms. Respondents who managed in difficulties noted 30% Almost reasons. of range a vided Organisations that did not apply to eitherinstitution pro-

organisation). (research organisation) or the NDA (religious, advice Lottery the of criteria with in fit not did work Their ted financialstatement. in They weretheprocessofsecuring a second audi- funding criteriaandprocessesworked. They didnot understand how the two organisations’ difficult applicationprocess. support to assist civil society organisations with the They feltthat the two organisations did not provide NPO. still in They weretheprocess of registering as an arduous. They feltthat the funding process was too long and for funding. They did not actively pursue these two organisations Six percent of these organisations noted Some or- tions andmakerecommendations forthewayforward. the NDA and the NLB in to order generate potential solu logue around the problems they have experienced with focus groups was to have CS Os engage in strategic - dia with the broader donor community. The purpose of the supplemented by organisations that have experience organisations that participated in the survey and were tern Cape.Focus group participants drawn from were Zulu-Natal, ments referredtointhetexthasbeenkeptconfidential. in is provided organisations that participated in the in-depth interviews funding cycles of the NDA and the NLDTF. The full list of draw out case studies of experiences through the various mation that was descriptiveof CSOs’ experiencesand to the in-depth interviewswas to collect qualitative infor Eastern Cape, sample comprised organisations from KwaZulu-Natal, was selected to participate in in-depth interviews. The forms arediscussed in more detail throughout the report. application the in filling for guidelines the and process The experiencesof organisations with the application aspirations.’ flexibility not your match as there is noroom for innovation and based/citizen-led framework, then these two donors are ‘If youare a responsive grant maker and work in anasset- approach ofitsownwork: funding organisations did not fit with the developmental One of the respondents felt that the approach of the two Five focus group discussions were facilitated in Kwa- From the survey sample, a sample of 20 organisations and Eastern Cape,Gauteng, Limpopo and Wes- Appendix 2, but the source of specific com Gauteng and Mpumalanga. The purpose of responsiveness to community needs and - - - 3South Africa’s 3.1 Political and economic context pared to 21% in construction and 27% in mining (Ibid.). By 2005, unemployment in South Africa was at its highest Prior to 1994 and leading up to the first democratic elec- poverty with just over 40% of the population unemployed17 (Bho- tions, the African National Congress (ANC) put forward rat & Kanbur 2005: 5). Not only were people losing their alleviation the Reconstruction and Development Programme (RDP) jobs, but young people and graduates were finding it framework to eradicate poverty and to address the severe social and difficult to obtain employment. economic backlogs of apartheid. By 1996, the RDP was from welfare Studies in poverty and inequality conducted in post- replaced by the Growth Employment and Redistribution to development apartheid South Africa have shown that poverty has (GEAR) programme. increased, that people who were poor in 1993 have not Faced with an inherited public debt of close to R190 been able to escape the cycle of poverty, and that in- billion of which foreign debt amounted to some R5.2 bil- equality between and within race groups has increased. lion with about 6.7% of the GDP and 24% of the budget As Ari Sitas (2001: 31) explains: being absorbed annually by interest on this debt, GEAR proposed a more conservative macroeconomic stance of ‘Last year, the same people were designated poor. The ‘fiscal discipline’ (Carter & May 1999: 12). Among other same were poor the year before, the year before that and things, GEAR proposed cuts in government spending to before that, down into a longitudinal graph that spans reduce the deficit, introduced tax concessions for big back before the 1994 democratic turning point, into the business, reduced tariff barriers (in the clothing, textile, apartheid era.’ leather and car manufacturing sectors), privatised gov- In 2001, South Africa’s per capita GDP placed it as one ernment assets, reduced state welfare programmes, and of the 50 wealthiest nations and among the 35 largest created a more flexible labour market. economies in the world. However, it was ranked 17th out Over ten years GEAR succeeded in stimulating some of 70 countries in terms of the number of people living growth in the South African economy and creating a on less than US$2 per day. South Africa also ranked 115th stable monetary environment, but it failed to meet the of 175 countries in terms of its Human Development targets it had set for economic growth and foreign direct Index (HDI) in 2001 – a decline from its 1992 ranking of investment. The plan was predicated on the assump- 93rd, making it one of a handful of countries which has tion that the benefits of economic growth would ‘trickle experienced a decline in the HDI since 1995 (Aguero et al. down’ to the poor, but the poverty headcount only de- 2006: 1). Income inequality in South Africa as measured creased marginally by 2005.16 by the Gini coefficient18 became more severe between There was a decline in formal employment by about 1995, when it stood at 0.565, and 2000, when it stood at 12% between 1996 and mid-1998 (Carter & May 1999: 12). 0.577). Between 1996 and 2001 the Gini coefficient rose The loss of jobs was highest in those sectors that largely employed unskilled labour, with the manufacturing sec- tor suffering a 6% loss in the period 1993 to 1998, com- 17 Using the broad definition of unemployment. 18 The Gini coefficient is a measure of distribution, expressed as a value which falls between a theoretical 0 (perfect equality) and 1 (complete inequality). When used to measure income distribution, 16 See Bhorat and Kanbur (2005), Aguero et al. (2006), Carter 0 would mean everybody receives the same level of income and 1 and May (1997 and 1999), and Habib and Padayachee (2000). would mean only one person would earn all the income. 13 14 MEETING THEIR MANDATES? and to address the growing plight of the poor, govern- by thenarrowdefinition(Bhorat &Kanbur2005:6). from 31% to 42%, and unemployment rose from 18% to 31% increased definition broad the using rate unemployment 5). Unemploymentthe and 2003: increasedbetween1995 signs of highvery of levels inequality (Aguero et al. 2006: it hasHowever, beenfound that index isalso on the decline, it isbymodestdegree. a very may beon the decline and whilst thepovertyheadcount seeAgueroetal. (2006),Carter &May(19971999)and 20 19 R1 871 for a household of 4.7 people as the benchmark, man et al. 2003: 3–7). Using the minimum living level of 0.42 to 0.51 and among coloureds from 0.53 to 0.55 (Land whites it moved from 0.43 to 0.49; among moved upin from 0.491970toinamongst 0.59 2000; households. Amongst African households, the coefficient holds is higher than (more severe) amongst non-African of 5). Thelevelincome inequality amongst African house that of the white population (cited in Aguero etal.2006: African elite in on poverty andinequality that per capita income of the unequal countries in the(Bhorat world &Kanbur 2005:4). from 0.68to0.73,making South Africaone ofthe most May, Van BergandMeth der al. 2006:2). the poverty gap and the severity of poverty (Agueroet between 1995 and(Bhorat 2000 & Kanbur 2005: 4)as did 34% to 32% from nationally increased headcount poverty national population (cited in Landman et al. 2002: 5). The the of 48% about – poverty in living were Africans South Van Bergand der Louw found that in 2000 20.5million To counteract this growing poverty and inequality Landman etal.(2003). Van der Bergh and Burger noted in their 2002 study Whilst onwardsarelimited, data fortheperiod 2000 University ofSouthAfrica. The benchmark wassetbytheBureau ofMarketingResearch, South Africa hadalmost caught up with 20 agreethat the poverty rate South Africa stillshows Indians from

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a ue te Ds o eie h gas o itspoverty for alleviation/ reductionprogrammes. goals the define to MDGs the used has government African South The hunger. from suffer who than US$1 a dayand to halve the proportion of people to halve the proportion of people whose income is less directly to the socio-economic well-being of people, aim on progress in their countries. These goals, which speak governments to reporttheinternational community Development In 2000, the United Nations announced the Millennium lihood shocks (Friedman & Bhengu 2008; PSC2007b). poverty and to assist poor households to weather live- programmes to provide assistance for those trapped in ment initiated a number of poverty alleviation/ reduction • ties. AccordingtoHenriot(2002): kindsof end resultsthatthrough are desired anti-poverty activi the to speak also approaches different These equally distributed. is field the in power that so 15) 2007a: (PSC removed or so that the structural aspects of poverty areminimised and society economy the reconfigure to seeks proach their own circumstances; and the ‘transformational’ ap mental’ approach seeks to empower people to better of those who cannot fend for themselves;the ‘develop- farist’ approach tends to address the immediate needs to addressing poverty through government programmes. The ‘wel- approaches different several are There thestate’sapproachtopoverty 3.2

welfarist approach topoverty. be seen as charitable assistance falling under the phans, the and elderly the handicapped. This could or- widows, at specifically more aimed nets safety ate needs with welfare handouts and social security immedi - their meeting by poor the of suffering the Poverty alleviation Goals (MD projects are aimed at lessening Gs) as a set of indicators for - - • Poverty reduction projects are aimed at lowering earlier drawn a distinction between the ‘First Economy’, the numbers of those living below the poverty line which is the ‘modern industrial, mining, agricultural, and lifting them out of a life of deprivation by engag- financial, and services sector of our economy that, ev- ing in job-creation projects which pay wages above ery day, becomes ever more integrated in the global the poverty line, and by providing health and educa- economy’ and the ‘Second Economy’ which he called tion services, credit for small business enterprises the ‘third-world economy’ (Mbeki 2003: 2). The former and other opportunities to rise above the poverty President proposed a strategy which included encourag- line. This is seen as the developmental approach to ing the ‘growth and development of the First Economy, poverty. increasing its possibility to create jobs’ and implementing • Poverty eradication projects focus on restructuring the government’s anti-poverty projects and programmes society so that there is no longer growing structural to address the challenges of the Second Economy. He poverty and the absolute numbers of poor people added welfare to the two developmental aspects of his steadily decrease until there are only minimal excep- ‘three pillar’ strategy by stating that government inten- tional cases. These projects involve planning to set ded to build a social security net to meet the objective of priorities for shifts in power, for restructuring soci- poverty alleviation (Op. cit.: 2–3). ety, and for radical social and economic changes. This Government therefore combines poverty alleviation involves transforming society through policies based and poverty reduction by: 1) providing income support to on justice, compassion and inclusiveness which are deal with the immediate needs of the poor; 2) stimulat- generally based on building the knowledge and ing local economic growth to create jobs; and 3) grow- agency of people. ing the First Economy in the hope that the benefits of growth and development will trickle down to those in Research done by the Public Service Commission into the the Second Economy. The long-term objective of stimu- South African government’s poverty alleviation/ reduc- lating the economy and creating jobs is to wean people tion programmes and projects (PSC 2007a) found that, off social grants. within the state, there were inconsistencies in the way This thinking is in line with that of the World Bank’s the terms alleviation, reduction and eradication were thinking in the 1980s where it emphasised the impor- used. There was, however, an understanding that there tance of stimulating economic growth as a means to alle- are different types of interventions aimed at addressing viating poverty and for government to play a supporting poverty. The research points to a central distinction in role to the market by investing in: government between ‘welfare’ and ‘development’, re- flecting a desired movement towards a developmental ‘education, health, nutrition, family planning and poverty state and away from a welfare state. This shift in empha- alleviation; in addition, investing in infrastructure sis was clear when the Department of Welfare’s name (e.g. social, administrative, physical, regulatory and legal), was changed to the Department of Social Development. mobilising resources to finance public expenditures, South Africa’s anti-poverty policy is centred on a intervening to protect the environment and providing three-pillar formulation presented by former President a stable macro-economic foundation.’ (Slater, cited in Thabo Mbeki in a speech to Parliament in 2004. He had Schuurman 1993: 95). 15 16 MEETING THEIR MANDATES? • • • • (Friedman &Bhengu2008:14): jects. These programmes can be grouped as follows poverty reduction programmes comprising pro- 29 900 2007b) found that, as of 2007, the government had 40 Research by the Public thestate’spoverty 3.3 social services employment generating programmes, enterprise de- tion andchildwelfare. Strategy. Urban tainable nicipal infected by and affected people people, disabled for assistance care, school nutrition schemes, home-based care, such services aswater,electricity, education, health Basic household security housed invariousgovernmentdepartments. generation and local economic development and are vice (NYS).Theseareprojects that promote income flagship programmes such as the National Youth Ser Programme, learnerships, co-operatives, and some lic Works Programme, the erty alleviation projects, the Community-Based Pub velopment and income support medium-term grants. ter CareGrant and Grants-in-Aid which are long- and Pension, Disability Grant, Child Support Social assistance and grants reduction programmes Renewal Programme and RuralInfrastructure Infrastructure Programme, Rural Development HIV/AIDS as well as the Consolidated Mu which include adoption, child protec ervice Commission Service (PSC 2007a; includes subsidised basic Expanded Public Works such as the Old Age Strategy (ISRDP), and which includes pov- Integrated Sus- Grant, Fos- - - - - seeks toaddress‘assetpoverty’ (2007b:17). According to the PSC report,the land programme also development and job creation in the agricultural sector. port programmesalsoto seek encourage local economic Economy. The government’s landredistribution and sup Programme, both of which are aimed at the ment as provided for in the income-generating projects and local economic develop- jobs through the and electricity; ter andsocial development by creating vices through the housing subsidy and subsidised wa- security through the social grants, subsidised basic ser and underdevelopment. The focus is on providing social of the (PLAS). programme andtheProactiveLand Acquisition Redistribution for Agricultural Development (LRAD) sub- Settlement andLand Acquisition Land The PSCdocumenttogovernment’s included reference • •

employment-related social insurance These programmes are the practical interpretations through theNationalFoodEmergencyFund. Food the RefugeeeliefFund,Special Programme for ing the Social cash and in-kind transfersforcrisissituations includ Disaster Theseareshort-termcash relief: or in-kind Unemployment InsuranceFund. Redistribution programme which included the South African government’s approach to poverty Security and in-kind transfers during food crises elief Fund, Relief Fund,theDisaster Expanded Public Works Programme, DP ISR and Urban Grant (SLAG), the Land such as the Renewal Strategy Second - - - In 1997, the Department of Social Welfare moved itself away from the welfarist approach to poverty. According away from a welfarist approach towards one of self- to the DSD, it was seeking, through its Social Develop- reliance, i.e. encouraging people to be less dependent ment Programme, to promote a move away from relying on state assistance. In accordance with the change in on the state for welfare towards: underlying approach, its name changed to the Depart- ‘a holistic vision of development... to direct the focus of de- ment of Social Development. DSD’s Social Development velopment thinking towards encouraging clients to use the Programme was one clear example of government’s at- knowledge and expertise of individuals in their communi- tempt to shift away from its welfarist approach to pover- ties and resources available in their environment creatively ty reduction as it sought not only to implement income- and innovatively to address their socio-economic need.’ generating projects but also to promote ‘development (PSC 2007b: 59). and self-reliance... into the sphere of individual services’ (PSC 2007b: 57). The state tried to adopt the same kind of social devel- In the 1997/1998 financial year, the new Department opment perspective in dealing with unemployment of Social Development’s Poverty Relief Programme was amongst the youth. The youth (defined as those falling given R50 million and in 1998/1999 it was given R203 mil- between the ages of 18 and 35 years) constitute a third lion. DSD funded the initiation of several poverty reduc- of the population and their inability to find employment tion projects in partnership with CBOs, which were turned has a severe impact on individuals, families and the soci- into income-generating projects. With the assistance ety at large. Although the extension of the upper limit of of the Independent Development Trust (IDT), DSD was Child Support Grant eligibility from 14 years to 18 years able to establish many new projects and existing projects significantly increased access of young people to the were given additional financial support. Through its Pov- social safety net, the social and economic crisis facing erty Relief Programme, DSD supported 3 691 community the youth remains. The Presidency under Thabo Mbeki projects with over 533 650 beneficiaries (PSC 2007b: 58). took on youth unemployment by establishing the Na- Between 2001 and 2003 DSD had, with the support of tional Youth Service as one of its flagship programmes to the IDT, disbursed approximately R300 million to CBOs provide support to government departments to enable engaged in poverty reduction projects. them to: In 2005, DSD replaced the Poverty Relief Programme ‘deliver youth service programmes that meet departmen- with its Sustainable Livelihoods Programme and launched tal objectives as well as the broader vision of young peo- a pilot in the Eastern Cape. The Sustainable Livelihoods ple in service [by engaging] young people in a disciplined Programme was intended to make people’s livelihoods process of providing a valued and necessary service to the more secure through co-operatives and ‘sweat equity’ community in which they live, while increasing their own where ‘sweat equity’ was defined as the in-kind contribu- skills, education and opportunities to generate income.’ tion of people’s own labour. The shifts in DSD’s poverty (Friedman & Bhengu 2008: 136). programmes were signalling a shift in the state’s strategy

17 18 MEETING THEIR MANDATES? 21 www.youthportal.org.za tion ofdatabases ofemploymentopportunities. training programmes, and the creation and administra youth-owned businesses, provision of mentoring and and to individuals support financial direct of provision include the management and administration of the UYF, The tasks of the National Youth Development Agency Youth DevelopmentPlan andStrategyfor thecountry.’ and coordinate the implementation of the Integrated the economic development of young people and develop government; embark on initiatives that seek to advance port to initiatives across sectors ofsociety and spheres of ‘advance youth development through guidance and sup- 2008. Itsmandateisto: terms of the National Youth Development Agency Act of based in the Presidency and reporting to Parliament in entity, the National Youth Development Agency, also 11 May2004). have been unable to utilise all of its funds (Business Day, and theUmsobomvu ary 2009)to Fund wasreported both were accused of nepotism (Mail &Guardian mandates, their fulfilling difficulties had UYF the R1 billion in start-up funds. or establish their own small businesses. opportunities job find skills, obtain to youth the for ties fer among neurship, job creation, skills development and skills trans The Fundwasestablished in 2001 topromote entrepre by the Presidencyto support the activities of the NYS. labour market. and skills development in order to improve access to the years) by providing opportunities for work experience The NYSaimedto improve employability of youth (18–35 n 2009, the UYFandreplacedby In 2009,theNYSwereanew The Umsobomvu Youth Fund (UYF) was established South African youth by investing in opportuni However,both the NYS and It was given , 4 Febru- 21 - - - -

heid’s segregatedservicedeliveryapproach. ate the historical backlogs that were as a result of apart tion, health, welfare and housing in an attempt to allevi- an increase in social expenditure in areas such as educa people trapped in poverty. Ithas tried to do this through approach to one that tries to reduce the number of poor move away from a purely welfarist, poverty alleviation proach to poverty. Theseshifts haveseengovernment indications of shifts that are happening in the state’s ap The initiatives by government to alleviate poverty are 3.4 ‘increased increased stateexpenditure.Rather, pacity of state structures orparastatals to channel this been accompanied by correlating expansion in the ca increase in social expenditure by the state this has not and funding for NPOs,anational lottery for asimilarpurpose, funding body toraise public, private, and international ‘a national registration procedure for NPOs, a new state tional arrangementswhichinclude: state-civil society relationships through a set of institu tate this partnership role, the state has institutionalised state’s function, or in partnership with the state. To facili of conduit for deliveringserviceseitherin place of the Hence a segment of civil society has come to play the role (Ibid.). privatisation of the delivery of certain public services.’ sector taking advantage of the state’s commitment to the intermediaries, have partly been made possible by NPOsacting as making toNPOs.’(Ibid.). Swilling and an elaborate State-civil societyrelations real and Russell (2002:72) found that despite the expenditures new also by tax the structure expanded on social to role stimulate of development the private grant------

The NDA and the NLB (in its grantmaking role) are the from government to implement its poverty alleviation two state funding bodies that have been set up to strategy because this reduces their independence. (CSOs provide funding to CSOs to assist the state in its delivery which depend on the state for funds are less likely to play of services so as to contribute to development in the a critical watchdog role in respect of government action country. for fear of jeopardising future funding.) The establishment of the NDA was seen as a progres- The largest part of the money raised through the Na- sive step on the part of the state – setting up a govern- tional Lottery goes towards the funding of good causes. ment development agency that would seek to build the These moneys go into the NLDTF which vests in and is ad- capacity of CSOs to take on development work by provid- ministered by the NLB. Research into NLB grantmaking ing services to poor communities. The NDA saw itself as by Swilling and Van Breda (2006) comes to the conclu- the partner of civil society, the donor community and the sion that the National Lottery has become ‘both a long- state. As innovative as the idea of the NDA was, it strug- term fund raising mechanism and an effective distributor gled to get off the ground. NGOs and CBOs which were of funds to a wide range of non-profit organisations’. dependent on donor aid in the period prior to 1994 found They point out that the National Lottery has been able to themselves struggling to access donor funding because remain the least ‘political’ conduit by making grants avail- between 1994 and 2001 international donors shifted their able mostly to charities with a poverty alleviation agen- funding patterns from direct arrangements with CSOs da. However, despite these conclusions, NGOs and CBOs to funding government through bilateral country-to- have voiced their dissatisfaction with the NLB’s inability country arrangements. At the time, the NDA presented to effectively disburse National Lottery money. In a June a possible solution to civil society’s funding crisis as its 2009 newspaper article,22 it was reported that 72% of the main purpose was to make grants available to CSOs for R8.5 billion made available to the NLB for distribution poverty alleviation and poverty reduction projects. But between 2007 and 2009 had not in fact been disbursed. the NDA’s purpose was also to facilitate inclusive civil The same article also pointed to the fact that, in spite of society participation in the development of NDA strate- this lack of performance, National Lotteries Board mem- gies and its grantmaking priorities. It was intended as a bers were paid salaries in the amount of R7.5 million. The forum for dialogue between CSOs, donors and the state, NLB has been labelled ‘inefficient’, ‘not well managed’ and the NDA saw itself as the ‘premier partner’ in this and the allocations of funds to good causes has been de- arrangement. scribed as being ‘based on luck of the draw’.23 In its struggle to establish itself as the partner of civil There have also been complaints from CSOs24 that society, the NDA has become similar in its function to the NLB’s distributing agencies do not apply a simple its predecessor, the Independent Development Trust. and consistent process of acknowledging receipt of ap- It grants funds to CBOs and projects that assist govern- plications, considering applications and allocating funds. ment with the delivery of services and assist in stimu- lating the local economy. As such, the NDA has been 22 NGO Pulse, SANGONet. perceived as an arm of government rather than an inde- 23 Taken from various newspaper articles from NGO Pulse, SANGONet. 24 This has been documented in interviews conducted with CSOs pendent development institution. Concerns have also discussed later in the report and further verified in press statements been raised about the impact on CSOs of accepting funds made by civil society organisations. 19 20 MEETING THEIR MANDATES? from the state reduce the effectiveness of civil society? civil of effectiveness the reduce state the from essary feature of functioning democracies, does funding holds government and its structures accountable is a nec that society civil effective and active vibrant, strong, a of civilsociety in a post-apartheid South Africa. Whilst come for NPOs raises critical questions about the role non-profit sector. money for social services the main source of funds to the only projects dealing with culture and recreation received lion), and development and housing (R1.1 billion) while cusing on social services (R2.1 billion), health (R1.7 bil of the billion (R4.9 period same the over sector non-profit the also found that the bulk of government funds given to other self-generated income (Op. cit. 2002: 37). The study and dues fees, service through revenue its of 34% erate 21% to CSO revenues and the sector itself was able to gen average has been 50%. Private sector donors contributed the where Europe Western than lower but (39%) sector thein than ternational average of government contributions to the higher was sector non-profit the to ment sector. The contribution of the non-profit the by received funds total the of billion R5.8 period 1994 to 2002, government had contributed 42% or the in that found 34) (2002: Africa South in sector profit Russell’s researchinto the size and scope of the non- application processimposedbytheNLB. ginalised because of the highly technical and demanding are turned down. CBOs have complained of being mar- which qualify for grants in terms of the relevant criteria be disbursed. CSOs have complained that organisations to waitup to twoyearsforapprovedfunds to actually partial payment of grants, and someapplicants have had Applications have been lost, there have been cases of The fact that government is the main source ofin Despite the failings of the NDA and NLB, 50.9 million R50.9 (Op. cit. 2002: 35), thus making DS 5.8 billionR5.8 total) went to projects that fo were South African govern- Swilling and ------NGOs that make up one-third of the sector. The other for NGOs marked are going delivery to the service able toactasanindependent andcriticalwatchdog. half of the state is that the CS of NGOs being drawn into public on delivery be- service half of the state. The downside of an increasing number tional framework for NGOs to do on service delivery be- through the passing of laws which provided an institu resolved partially was conflict apparent this Hungary, In sense the required state to provide an essential service. independence from thestate,civilsociety in the widest social space in ship was a prerequisite to developing and consolidating is not a possibility. A positive NGO-government relation civil society in opposition to, or the exclusion of, the state and state has its shortcomings, it isclearthat building a borne et al. 2005). While the relationship between NGOs in the creation and sustenance of a just civil society (Os- of a symbiotic relationship between thestateand NGOs been replaced by a view that recognises the necessity damentally anti-state in its approach. This approach has democratic transition period, when civil society was fun of the state. This was a shift from that country’s post- funds tofunctions performservicedelivery on behalf the consolidation of democracy, NGOs accepted state in such entitiesintomoreofaservicedeliveryrole. power of CSOs to hold the state accountable by steering civil society to do this, then thisto willservedilutethe of strength the on relying effectively services and goods democratic institutions’ and if it is unable to these deliver on hearing citizens and encouraging their participation in primarily on ‘delivering goods and services and far less an overly centralised style of government that is focused Friedman (2002:4)isof the opinion that if the state has Hungary where, in an attempt to play a vital role in In This kindofcompromise of civilsociety has happened Hungary, two-thirds of government funds ear- Hungary. While CSOs in O sector has become less Hungary required - - - two-thirds of NGOs in that country are oriented towards goes to government-established public foundations and civil society functions which include mediating between other quasi-NGOs, Hungarian NGOs receive a significant civil society and the state; holding the state and the mar- amount of support from central and local government ket accountable to the public; helping citizens participate (Ibid.). actively in decision-making processes; ensuring some Thirdly, NGOs can generate income through taking citizen autonomy; promoting cultural diversity; develop- on government contracts. As part of the financing de- ing local information networks; and educating citizens. scribed above, NGOs in Hungary have been increasingly These receive only one-third of the resources (Osborne involved in the provision of public services in the fields et al. 2005). The service delivery function of the first type of education, social welfare, and health care. In terms of of NGO developed as a response to the initial shortages the 1997 law, PBOs are non-profit organisations that un- and inequalities in the public welfare system and these dertake state or local government responsibilities, and entities were usually established to address a specific are contracted by a state organ to provide the services in need. Recently, the government has been establishing question. Although only about 6–8% of Hungarian NGOs dedicated public foundations to specifically take on the have this status (Ibid.), they represent good examples of provision of public services previously provided by the NGO-government partnership that rarely existed before. state. The skewing of government funds to service de- Finally, a Parliamentary Committee for the Support livery-type NGOs and its establishment of public founda- of Civil Organisations, which used to grant budget subsi- tions to provide public services has seen the sector grow dies to national associations, has existed since the early in terms of service provision and weaken in terms of ad- 1990s. More recently it has taken on responsibility for vocacy and social justice work. legislative policy concerning the sector, while its grant- The forms of co-operation between government and giving role will be transferred to the National Civil Fund. NGOs in Hungary include a wide range of tools and mech- The institutionalisation of state-civil society relation- anisms, both at national and local levels (Bullain 2004). ships as well as state-funded NGO initiatives in Hungary Firstly, there is the legal framework. In early 2000s, Hun- has raised critical issues, including how laws, financing gary was considered a leader in legislation affecting non- and co-operation mechanisms are being implemented. profit organisations in the European region. Successive Bullain (2004) identifies four areas of concern. governments introduced laws and programmes that en- The first is a lack of transparency. The State Audit Of- couraged and supported NGO activity. The so-called One fice Report found that 80% of central state (government Percent Law (adopted in 1996), the 1997 Law on Public and ministry) support to non-profit organisations was Benefit Organisations (PBOs) and the recently adopted given based on individual decisions (as opposed to open National Civil Fund Program were all mechanisms to grant competitions) and 50% of the funds of public foun- channel state support to CSOs. dations were distributed without grant announcements Secondly, there is direct government support which (Ibid.). The majority of NGOs which had received public constitutes 34% of the non-profit sector’s total income funding did not account for it correctly. Also, many or- (Ibid.). This is less than the Western European average ganisations submitted applications to ‘various sources of of 50%, but is among the highest in Europe as a whole. funding for the same project and then fiddled with the Even if one considers that much of this support actually money’ (Ibid.). 21 22 MEETING THEIR MANDATES? ble-edged sword.Ithelped the work of several N GOs, but the part of government to support CSOs has been a dou ment fromtheirpeers. acknowledge getting also but activities, their financing only not difficulty had pressures political from free stay a given; ascommonplace. The fewNGOs that to tried NGOs, consider this extreme levelof political division as provide state services. Unfortunately to contracted were NGOs of pool different a level, local in helping to shape policy in certain areas;and even at wereinvolved NGO experts of pool different a others; different pool of NGOs received more state support than a governments, different Under sector. non-profit the in reflected also is parties left-wing and right-wing of ers The politically divided nature of society between follow ment co-operation has always been unduly politicised. (Ibid.). place first the in contracted was support non-grant of 40% only and support, grant of 70% only fact, In either. Ministries have not held theirgrantees accountable because they had support received in the previousyear. support without submitting a budgetsimply request, adopted by the example, NGOs that named were in the annual budget The second major area is the lack of accountability. For Finally, the increased interest and financial support on The third major area of concern is that NGO-govern Hungarian Parliament annual received Hungarians, even - - - - (which resultsindependence). ceiving state funds to conduct work service delivery for social justice (which independence) requires and re tion to a post-apartheid government and the implications South African CSOs in terms of what their role is in rela- society relationship. introduce real improvements in this evolving state-civil have adopted new, professional norms and are trying to NGOs leading more and more and officials government ment. and a common interest in advancing social develop- clientele, rather than professionalism, mutual respect providing mutual advantage and the building of loyal has decade beenbasedon paternalism, favouritism, NGOs and the Hungarian government overthe past political orientationofthecurrentgovernment. led toan unhealthy NGO of dependence –regardlessthe has influence government increased This advocacy. as NGOs that are involved in non-servicework such delivery increased dramatically with a reduction in the number of been weakened. The proportion of quasi-NGOs has also in terms of service provision, its advocacy functions have grew sector the While whole. a as sector non-profit the in it alsoresulted an increase in government on pressure The Hungarian experience raisescritical questions for Bullain concludes (2004) that co-operation between In recentyears,however,an increasing number of -

4The National 4.1 Background and context Lotteries Prior to 1994, gambling was illegal in South Africa, includ- The Lotteries Act 57 of 1997 provides for the regulation ing betting on sports events other than horse racing. of lawful lotteries, sports pools and promotional com- Board and Because gambling was allowed in certain former ‘home- petitions, and the prohibition of others. The Act made the NLDTF lands’, there were many casinos in those parts of the scratch card competitions illegal rather than recognising country. There were many illegal and underground gam- their value as proven mechanisms of support for poverty bling operations around the rest of the country in spite of alleviation efforts. The scratch card industry collapsed, the prohibition (Louw 2002: 4). leaving a gaping hole in the finances of organisations like During the early 1990s, a few privately-established Ithuba, Community Chest and Viva. organisations like Community Chest, Ithuba and Viva Ithuba Trust, Kagiso Trust, Viva Trust, United Com- ran gaming operations to raise money for good causes munity Chest of South Africa, World Wide Fund for Na- (Louw 2002: 5). Ithuba, established in 1989, was one of ture, the South African National Sports Council and the the most successful. It ran public fundraising events, col- South Africa Red Cross established the Ubuntu National lected corporate and private donations, and gave all of Welfare and Development Trust (Ubuntu Trust) in an at- the money raised to Ithuba Trust which disbursed all of tempt to position themselves to be appointed as the dis- the money to other organisations (Matube 2005: 16). In tributing agency which makes decisions about National 1992, Ithuba launched a scratch card competition and by Lottery funds for charities (Matube 2005: 23). The South 1997 it had gathered R150 million through this, its most African Grantmakers’ Association, Charities Aids Founda- successful fundraising method. Community Chest and tion and SANGOCO joined the Ubuntu Trust, bringing the Viva also made use of scratch cards to raise funds for dis- number of CSOs under a single umbrella to about 10 000 bursement to other organisations. (Ibid). However, the Ubuntu Trust was not appointed as When the ANC came into power in 1994, it was faced the DA for charities and it subsequently disbanded. with a burgeoning underground gambling industry In a Carte Blanche television documentary aired in (Louw 2002: 5) due to loopholes in the 1965 Gambling Act 2000, Alec Erwin, Minister of Trade and Industry at the (Matube 2005: 22). Government commissioned a number time, was asked why the government chose to close of inquiries into the gambling and lotteries industries to down Viva, Ithuba and the KwaZulu-Natal Lotto when it inform future policy. The Gambling Board’s view was that knew that this would cause a delay in the disbursement gambling was a social reality that should be permitted, of much-needed funds for good causes.25 Erwin replied, and was an opportunity for black economic empower- ‘because the success of the main lottery depends on the ment. It said government should seek to regulate the fact that it’s got a monopoly ... quite simply’. industry, counteract the negative social impact of gam- The government’s policy choice in this matter caused bling, and ensure that profits would be used to benefit heavy financial hardship to a range of existing grantmak- the poor (Louw 2002: 5). Channelling the profits to good ers with proven capacity, and demonstrated scant re- causes was a way of overcoming religious and moral op- cognition of the valuable work that CSOs had been doing position to a government-sanctioned lottery. for many years before it came to power. It could have

25 ‘Lotto loot delayed’, Carte Blanche, 27 November 2000. 23 24 MEETING THEIR MANDATES? ‘miscellaneous’ category. the – category fifth a in distribution for earmarked funds and the NLB, has the power to make grants from Lottery try, acting in consultation with the Minister of Finance in national government. The Minister of Trade and tation with the ministers responsible for those functions pointed by the Minister of Trade and in the other threecategories are adjudicated by DAs ap no allocations have been made.Applications for funds sible for the egory were to be administered by the Minister respon cat first the in Funds heritage. national and culture arts, and development; charities; sport andrecreation; reconstruction categories: four in projects non-profit to risdiction oftheDepartmentTrade andIndustry. NLB. The National Lottery and the NLB fall under the ju good causes. The Fund vests in and is held in trust by the tory of the money raisedthrough the National Lottery for Lottery Distribution Trust Fund.TheNLDTFisthereposi- titions and sports pools; and 2) administers the National tional Lottery and all other lotteries, promotional compe Board, which, among other things: 1) regulatestheNa- legislativemandate The Lotteries Act established the National Lotteries 4.2 delivery’. government to match social commitments with actual indicative of the increasing inability of the South African social factors needed to make legislation work and is, sadly, ‘complete disregard for the necessary institutional and According toLouw(2002:2),thisshowed funds to good causes, but it chose to appoint other DAs. channelling in experience of years their from benefiting a partnership withorganisations all themember and appointed the Ubuntu Trust as a DA, thereby forming Funds in the NLDTF must be allocated and disbursed RDP, but the Ministry no longer exists and Industry, in consul Indus------for attending meetings or performing other duties. are paid an hourly rateand reimbursed forexpenses appointed are on a part-time(non-executive) basis and rmn officials. ernment persons of the NLB so far have been high-ranking gov- government (section 3(2)). Itis notable that both chair sevenmembers of the Boardmay not be in the serviceof any sphere of the of four at least that specifies tion for the independence of the Chairperson. The legisla tions of the Board (section 3(1)(a)). ence with to regard mattersconnected with the func ofthe be someone who has applicable knowledge or experi- thecomposition is NLB. The Act merely states that the Chairperson must of concern area first The 4.2.1. e 27 26 Office Finance the 3) and contracts; grant their with ees agreements and for monitoring the compliance of grant grant issuing for responsible is which Office, Compliance grant applications and forliaising with applicants; 2) the processing and receiving for responsible is which Office, fectively disbursedtogoodcauses. is therefore responsible for ensuring that grants are ef- appropriated for expenditure by the board...’. The Board states that sum ‘every that is paid to the fund shall be 26 Section ticket. lottery valid a of holder the as defined tional Lottery isadequatelyprotected.‘Participant’ is ensure that the interests of participant every in the Na tion 10(c)). to administertheNLDTFandholditin quired trust(sec- functions are both regulatory and administrative. of theNLBin relation to theNLDTF. All oftheNLB’s TheCEOisnotamemberoftheBoard. The NLB is in control of: 1) the Central Applications The second area of concern is the role and function structure andfunction oftheLottery. This issueisdiscussed indetailthe sectionabout the 10 January 2011. -mail correspondence withNLBC The NationalLotteriesBoard Section 10(b)(ii) states that the Board must 26 The Chair and all board members EO Prof.Vevek Ram, It doesnot provide

It is re 27 ------which is responsible for making payments to grantees. The The NLB asked the Minister to amend the legislation to core of the grant process, with the exception of adjudica- address these shortcomings and recommended the estab- tion of proposals which is the function of the DAs, falls un- lishment of an oversight committee made up of the chair- der the management of the NLB. The NLB is therefore in a person and two NLB members. The oversight committee key position to exercise oversight of DAs and ensure that was intended to have the power to scrutinise any award the processing of applications takes place efficiently and listed in the DAs’ schedule of awards as well as any rejec- timeously. tion to ensure compliance with due process and applicable Given the wording of the Act, it is disappointing that standards (Louw & Ronald-Louw 2008: 65). However, the the NLB and the Minister seem to have taken a very nar- DAs opposed the oversight committee, so the Minister dis- row interpretation of their responsibility in respect of the mantled it. grantmaking function of the Board. The NLB has opted to stay on the periphery of how funds are allocated and dis- 4.2.2. The distributing agencies tributed, and says it has no oversight of the distribution of The Act gives the Minister the authority to appoint distrib- funds by DAs.28 uting agencies, but very little thought has been given to The NLB is required to report to Parliament on how how the DAs will be managed, to whom they are account- funds in the NLDTF are spent. However, the Board has able, what staff support they will be given, or how their made submissions to the Minister in which it has com- expenses will be covered. plained of the lack of accountability mechanisms for DAs, The first area of concern is that there is no accountabili- a gap which it says reduces its power to influence the dis- ty mechanism in place to oversee the efficiency of the DAs’ tribution of funds – how much and to whom grants are processes and the degree of professionalism in their allo- given. cation decisions. Whilst the NLB has to account for how CSOs have complained about long grant processing National Lottery funds are spent, it says it has no oversight turnaround times; long delays in payments of approved of the DAs. There have been instances where members of grants; shoddy treatment at the hands of the CAO; and the the DAs have awarded grants to organisations with which lack of adequate explanations for why certain applications they have an association. In addition, the Auditor-General have been rejected. These complaints have been aimed at has found cases of irregular expenditure because DAs did the NLB rather than at DAs, because the Board is the public not follow correct procedures. face of National Lottery funding. The DAs have remained largely invisible. The NLB considers its hands to be tied when it comes to overseeing the work of the DAs: ‘the present legal framework does not allow for the NLB to engage with applicants, and it is also limited to how proactive the staff of the National Lottery can be in their engagement with applicants as the National Lottery’s staff should not be seen as trying to influence the decisions 28 But the SAEP judgment has now determined that DAs are committees of the NLB. 29 which, according to the Act, lies solely with the DAs.’ 29 interview with Prof. Vevek Ram, 11 August 2010. 25 26 MEETING THEIR MANDATES? interviewwith Prof. Vevek Ram,11August2010,andinterviews 30 these sions seldom happen and are not regularly scheduled. NLB CEO have indicated that these report-back ses - Minister appoints them. DAs to are required reportto the Minister because the ity.’ (NLB2009a: 18). [sic] [sic]. tions andthe authority of the Distributing Agencies (DA’s) the samepeople. be not should distributor the and regulator the of staff oversight ofthedistributor, the regulatortoexercise Actrequires the because says (2003) Budlender Geoff of grants are madeto grantees. payments that ensures which Office Finance its of vices ance with these agreements; and madeavailable the ser compli and agreements grant with deal to Office ance made available the services of its Operations and Compli itsmanagement; under falls which Office Applications responded to this directive by establishing the Central NLB The obligations. their fulfil to them enable to DAs the to support provide would NLB the of staff the that around this legislative shortcoming, the Minister decided of the staffing the NLB, no such provision has been made forDAs. To get for provision makes Act the while mechanism currentlyinplaceforDAs. This is a cause for concern as this is the only governance ‘Disbursement sentiment: The NLB’s Audit Committee has expressed the following Gideon Sam,Chairperson the DistributingAgency forArts,CultureandNational Heritage; held on6August 2010 withProf.DorcasJafta,Chairperson of The second area of concern in the legislation is that and These decisions it remains grants of are grants are a not concern made specifically are owever, the However, DAsand the at [sic] of

the the In a legal opinion, Adv. made audited Audit discretion on Committee by terms, any of the Author condi- DA’s that 30 - - - - Figure 6: tery’s grantmaking function, which is outlined in one another has resultedin disarray in the National Lot the various mechanisms for grant distribution relate to vagueness in respect of reporting mechanisms and how NLDTF tocovertheseexpenses. the NLB has no legal basis for drawing money from the legislation, the in mentioned specifically not are DAs the ments that are authorised in law. cause the NLDTFisastatutory fund it may only make pay running the DAsshould also be bornebytheNLDTF.Be- this shortcoming, the Minister decided that the costs of it makes no such provision for the DAs. To make up for sion for theNLB’s expensesto by theNLDTF, be covered A third area of concern is that, while the Act makes provi- staff performingbothNLBfunctionsandDAfunctions. By contrast, the NLB’s CEO sees no problem with NLB The abovementioned gaps in the legislation and the

Currentstructure, functionsandaccountabilityofNLB grantmakingmechanism Since the expenses of figure 6. - - Finance Office 4.2.3. Proposed changes in legislation • The criteria for assessment of the applications should The NLB has said that changes to the Lotteries Act are be part of the legal framework to provide clear guid- being proposed, and that the DTI has requested input ance to DAs on which proposals to fund. At the mo- from the NLB and the DAs on this matter. A number ment decision making in the DAs is not very trans- of key suggestions have been made by the NLB and parent. The lack of assessment criteria in the Act the DAs:31 increases the possibility that DAs will make grants to organisations they are close to. • The gaming side and the grantmaking side of the Na- tional Lottery should become separate entities, as is • DAs should have full-time staff employed by the the case in many countries, e.g. the United Kingdom. National Lottery. • With regard to the National Lottery, the NLB should The Minister’s NLB nominee is opposed to separating the only be the regulator of the gaming side of the busi- grantmaking function from the gaming function of the ness, and it should have the necessary skills and ex- Board: pertise to govern that business. ‘The National Lottery [must be seen] as a chain in which The DAs should be separated from the other parts of • one part is focusing on gaining revenue from lotteries and the National Lottery and should have to account for the other part of the chain distributes the funds to good their decisions directly to a proposed separate grant- causes. As such the National Lottery is not more diverse making entity. In this way, the structure and function than other businesses with boards which oversee both pur- of each component will become more focused. If the chase of raw materials, production, marketing, sales and components are separated as proposed, the Auditor- customer care. It is the Board’s role to oversee the entire General will be responsible for overseeing the com- chain and it would not be optimal to look at each part of pliance of each entity. the chain in isolation.’32 • Because the funding areas of the DAs are too broad for one structure to cope with, each DA should have its own board with in-depth expertise of the relevant field, and its own administration unit dedicated to servicing the applicants (successful and prospective) and the DA itself. These boards should monitor the turnaround times for processing applications.

31 sources: Prof. Ram (interviewed 11 August 2010); NLB COO and CAO head Jeffrey du Preez (interviewed 5 August 2010); and Dr Maitse (interviewed 6 August 2010). 32 interview with Zodwa Ntuli, 8 October 2010. 27 28 MEETING THEIR MANDATES? e-mailcorrespondence withProf. R 33 isearmarked which revenue, lottery Georgia’s cifically, ita spending on education between 1977 and 1997. theless, on average, lottery revenues increased percap little accountability at the state level (Fisher2010).None to federal withdrawal of educational funding and leaves tion (Fisher 2010).Thefungibility of funds is often due only replaced funds previously being put towards educa (McGowan 1994). Thus lottery revenuemay actually have used tofund day-to-day operations of existing schools supplements to build new schools, for example, but are 2010). Itisimportant to note that these funds are not approximately $14 billion for education since 1985 (Fisher education since 1972,andCalifornia’s lottery hadraised since 1967, Michigan $10 billion had gatheredover for had raised $21 billion through the lottery foreducation towards education. For example, as of 2002, NewYork revenue of lottery sums significant directed has funds Florida andNewJersey(McGowan 1994). Earmarking of sion, undated). These states included California, for education (National states in exclusively the lottery revenue US earmarked for earmarked government projects. ies and where revenue from these state-run lotteries is The USA is one country where states run their own lotter- ‘government licensing oftheLottery, the currentshortcomings in the legislation regarding the CEO, aspartof its investigation into ways ofaddressing possibility of a state-run lottery. According to the NLB Another issue that is being discussed in the Ministry is the 4.2.4. Astatelottery? lottery isoneofmanyoptions.’ operation before amending the Act. A state operated will be exploring Gambling 33

am, 6October2010. other Impact In the late 1990s, ten models Study Commis of Illinois, lottery Spe- - - - - that purpose from the general fund. The money ‘saved’ appropriations it would otherwise have had to allot for lows the legislature to reduce by the same amount the programme, such as public education, in fact simply al- specific a for used proceeds lottery that in misleading is (Fisher 2010). towards raising ress thebudget of certain departments prog significant make can funds lottery earmarking that forothercauses.lottery revenue This study indicated earmarked which states in 30% and revenue, earmarking not states in 40–50% only to of compared revenue, lottery 60–80% by increased spending education revenue, spending. The results showed that in states earmarking increased lottery sales correlated with rising educational states where earmarking was already in place, to see if creased the educational budget. The study also analysed see ifswitching to earmarkingfunds for education in revenue. Fisher(2010)cites a 2002 study of 16 states to earmarking is still a productive way of managing lottery to being otherareas.Despite diverted this shortcoming, the department because it merely replaces money now such as education does not raise the overall budget of ing is thefact that money directed towardsadepartment that constituentsexpectanddemand. consistent sources of revenue in order to fund activities component of state revenue able to provide states with are no longer one-time events; instead they are a critical vernment and construction of public buildings. Lotteries reation, economic development, medicalcare,local go- directed towarduses as varied tourism, parks and rec- other educational programmes. lottery generated$6 billion towards college funds and in educational spending. From 1993to 2005, Georgia’s for education, provided the means for high increases owever, critics However, charge that the earmarking of funds According to Fisher (2010) a major flaw with earmark In 15othercases, it is - - - remains in the general fund, to be spent on whatever Sikhula Sonke had made one in 2007 and another in purpose the legislature chooses. Critics add that, as there 2008. None of these applications had been successful. is little or no evidence that overall funding has increased These organisations accused the NLB of administrative for the targeted recipients of lottery revenues, the only bungling, and they asked the Western Cape High Court result has been to increase the discretionary funds avail- to order the NLB to reconsider some of these applica- able to the legislature, which may be a key reason for the tions under the Promotion of Administrative Justice Act popularity of lotteries in the state houses (National Gam- (PAJA). The judge ordered the NLB to reconsider three of bling Impact Study Commission, undated). the applications within 60 days, and if it turned down the A state-run lottery will most likely impact negatively applications again, to provide the applicant with written on South African CSO revenues. Changes in funder pref- reasons for its decision. erences over the last 15 years have meant a loss of fund- The judgment established several key issues of law ing to South African CSOs, and many of these organisa- around National Lottery funding of good causes: tions have struggled to survive. The government set up DAs are not juristic persons in their own right, they the NDA and the NLB on the premise that state support • are committees operating within the NLB. Their for CSOs would help ensure the survival of a strong, ca- members are appointed by the Minister and they are pable sector which would assist the state to achieve its remunerated by the NLB (para. 20). poverty alleviation objectives. With the NDA failing to deliver on its mandate to effectively provide funding to • Once deserving organisations are identified by the CSOs, and with the private sector focusing its corporate DAs and awarded a grant, the NLB is responsible for social investment on service delivery with BEE points, the making the requisite payment and ensuring that all creation of a state lottery may divert much-needed funds conditions are met and continue to be met (para. 21). away from CSOs which would have a crippling impact on • Applications for funding to the NLB and the DAs con- the sector. stitute ‘administrative action’ in terms of the Consti- tution and PAJA. Decisions are therefore reviewable 4.2.5 SAEP and Another v The National by a court, and any failure to make a decision is also Lotteries Board and Others34 reviewable (para. 23). The South African Education and Environment Project • Only the Minister and other members of the Cabinet (SAEP) and Claremont Methodist Church Social Impact have the power to make rules about applications Ministry, Sikhula Sonke are NGOs which assist needy (para. 34). people on the Cape Flats by providing early childhood de- DAs have no statutory or regulatory power to make velopment services, childcare, pre-school education and • rules which are binding on applicants for funding the training of workers in these disciplines. (para. 32); DA guidelines are non-legislative ‘guiding SAEP had made seven applications for National Lot- policies’, they are not peremptory35 (para. 38). tery funding for this work between 2003 and 2009, and

34 South African Education and Environment Project and Another v 35 That is, non-compliance with the guidelines is not enough of National Lotteries Board and Others, Western Cape High Court, a reason to refuse an application. case 22352/2009 [2010] ZAWCHC 220 (26 August 2010) 29 30 MEETING THEIR MANDATES? • who application has demonstrated there are many such projects of it beingallocated forworthy sociallyprojects. As this ‘...the the NLB holdspublic’smoney... intrust for purposes management ofitsgrantmakingfunction: Judge countable onlytotheMinister. because, being appointed by theMinister, they areac sible for calling the DAs to account for theirperformance turns the NLB’s long-held position that it is not respon countable to both the Minister and the NLB. This over Because committees DAs areoftheNLB,they are ac ‘It speeding [sic][speedily]accesslotteryfunds.’ (para. 86). to delivermuchneeded social servicesthe by inabilityto start.)’ (para.87). peremptory criteria means that one has to return to the where the slightest non-compliance with self-imposed partake in agame ofadministrative snakes and ladders, there is noreason why applicants for funding have to administrative action is entrenched in the Constitution, Furthermore, in an era of transparency where fair and than a year (up to eighteen months in certain cases...). agencies in civilsociety should have to wait for more

is to beimposedwhen money is granted. considering applications, and suggesting conditions The powersof the DAs are limited to receiving and money (para.34). much money should be madeavailable,ordistribute have the power to call for applications, decide how simply [sic] Gamble expressed strong criticism of the NLB’s are unacceptable simply being that deprived needy NGO’s of the [sic] 35 Theydonot opportunity and other - - - - timeframes forprocessinggrantapplications. NLB grantmaking, the Boardhas startedimplementing a grant. Since the courtthat determined PAJA applies to grant and suggesting conditions that may apply to such powers of the DAs arelimited to deciding who may get a merely committees of the NLB, and determines that the the grantmaking function, determines that the DAsare portant because it makes the NLB wholly responsible for are awelcome intervention. The SAEPjudgment is im - effective grantmaking. Proposed amendments to the Act critical gaps in the Lotteries Act that are hindering The NLB and the DAs have recognised that there are the Lottery(Louw2002:3). of operator licensed the Gidani, to goes 20% and prizes, card scratch or Lotto won have who people to goes 50% to good causes through the NLB’s distributing agencies, scratch cards, afterVAT, is made available for distribution citizens. Thirty percent of the sale of Lotto tickets and that would assist in improving the lives of ing, arts, cultural, social and environmental projects insport- engaged organisations non-profit for funding al Lotteryisaimedatprovidingasustainable source of making purpose. The grantmaking aspect of the Nation The National Lottery has a gaming purpose and agrant- 4.3 4.2.6. Concluding remarks of theNationalLottery Structure andfunction

South African -

4.3.1 The National Lotteries Board • Ensuring that the National Lottery and sports pools are conducted with all due propriety and in accor- • Role and function dance with the Constitution and all other relevant The NLB is established by the Lotteries Act and its mem- legislation together with the licence for the National bers are appointed by the Minister of Trade and Indus- Lottery; try. The Board is made up of seven members who serve a term of five years and may be eligible for a second five- • Ensuring that the interests of every participant in the year term. Its composition is as follows: National Lottery are protected adequately; • A Chairperson, for whom the public may submit nom- • Ensuring that the net proceeds of the National Lot- inations and who is appointed after public consulta- tery are as large as possible; tion in all nine provinces and following the recom- • Administering the NLDTF and holding it in trust; mendation of the relevant committee of the National • Monitoring, regulating and policing lotteries of all 36 Assembly; kinds as well as promotional competitions; • One member designated by the Minister of Trade • Advising the Minister on percentages of money to be and Industry (the Minister’s nominee); and allocated to the different categories of good cause • A maximum of five additional members who must for distribution through the distributing agencies; have the necessary business acumen, knowledge • Advising the Minister on the efficacy of legislation and experience for the Board to function well. pertaining to lotteries and ancillary matters; One of these members must be a legal practitioner Advising the Minister on establishing and implement- and one must be a chartered accountant. At least • ing a social responsibility programme in respect of four of these members must be independent from lotteries; any sphere of government to ensure that the NLB functions as a neutral regulator acting in the public • Administering and investing the money paid to the interest (Louw & Ronald-Louw 2008: 49). NLB in accordance with the Act and the licence for the National Lottery;37 The functions of the NLB are stipulated in Section 10 of Performing such additional duties in respect of lot- the Act: • teries as the Minister may assign to the NLB; • Advising the Minister on the issuing of the licence to Making such arrangements as may be specified in the conduct the National Lottery and any other matter • licence for the protection of prize moneys and sums relating to other lotteries and the rules that apply (as for distribution; and specified in Section 14(2)(g); • Advising the Minister on any matter relating to the National Lottery and any other lotteries or any other 36 Currently the Portfolio Committee on Trade and Industry. matter on which the Minister requires the advice of 37 The money in the fund comes from the National Lottery, interest income and other money paid lawfully into the fund (Section 23). the NLB. Money in the fund not required immediately may be invested with the Public Investment Commissioners or a financial institution approved by the Minister of Finance (Section 25). 31 32 MEETING THEIR MANDATES? and police Uthingo’s work. it’s our responsibility... the Board has to act as a watchdog distributing agencies unlike everybody who istrying to say ‘It’s not us–we’re not responsible for appointing the to organisations,hereplied: sion about the delays in the distribution of NLDTF funds When NLB Chairperson Joe Foster was asked on televi- NLDTF.’ (Louw &Ronald-Louw2008:54). the SAEPjudgment. tive functioning of the NLDTF. This has been confirmed in the periphery of the distribution, it is central to the effec- seetheSAEP’s headsofargument initscaseagainst theNLB. 40 interviewwith Derek Watts on‘Lotto lootdelayed’, 39 38 quirements are met. tion and ensuring that the requisite payments and all re making these funds available for allocation for distribu moneys are ‘appropriated for expenditure’ (section 26), The Lotteries Act the requires NLB to ensure that NLDTF requires ‘Acting as the regulator and inspectorate of illegal activities another: one with conflict in come may which functions different administrative, in terms of the NLDTF. These arevery of aspects of the legislation and its implementation; and tory, in terms of the National Lottery; advisory, in terms The functions of the Board are a combination of regula- Trade andIndustry.’ causes’ money, but distribution is up to the Department of Carte Blanche,27 November 2000. Uthingo wasthe licensedLotteryoperator atthetime. different skills 39 40 TheNLB istherefore not simply on and 38 It also looks after the good capacity to administer

the - -

i nterview with 43 i nterview with Zodwa Ntuli,Minister’s nomineeontheNLB, 42 interviewwith Prof. Ram,11August 2010. 41 ous Ministers of Trade and lack of priority given to [the National Lottery] by the vari- new Board appointments in 2009 as an indication of ‘the have sat’, and described the year-long delay in making was in place forseven years,sat‘longer than it should on Sam expressed the opinion that the first Board, which appointed five of the seven members of the Board. Gide- changed four times sinceIn2003,the 2000. Minister re with the exception of the Minister’s nominee who has years. Therehave been few resignations and changes, ing sideoftheNationalLottery. portant issues relating to both the gaming and grantmak key risks,policy issues and regulatory issues as well as im- Board meeting, after everyshealertstheMinister about ings’. ‘the Minister does not necessarily attend these brief- to the Parliamentary Portfolio Committee yearbut every ed by the Minister of Trade and Industry.TheNLB reports The membersof the National Lottery Boardareappoint • ed theANCin the National Council of Provinces. Patricia pointed as the first Chair of the NLB, Joe Foster represent party and its associated organisations. Before being ap since 1999 havehad strong connections with the ruling Negota). has six new members,with one re-appointment (George for the NLB’. or expertise which the Minister believes will be beneficial and appointed by him or herto bring knowledge, skills nee does not represent the Minister but is nominated Agency forSportsand Recreation, 6August 2010. 8 October2010. Membership of the NLB has been stable very overthe Some of the people who have been NLB members Membership 41 According to Zodwa Ntuli, ‘the Minister’s nomi 42 While she does not necessarily report back Gideon Sam,Chairperson oftheDistributing Industry’. 43 The current Board

------Fakude-Nkuna was a member of the ANC in Mpuma- The appointments of the two licensed operators of the langa.44 George Negota worked at the ANC Department Lotteries have been controversial. The first licence was of Manpower in the period 1990–1992, and served as a awarded to Uthingo. Naledi Pandor, who was Minister of non-executive director at Palabora Mining Group, making Education at the time, was a shareholder in Black Manage- him the second executive of that corporation to serve on ment Forum Investments which owned 10% of Uthingo. the Board.45 Henry Makgothi had a long association with Cyril Ramaphosa, a member of the ANC National Execu- the ANC, serving as President of the ANC Youth League tive Committee, was executive chairperson of Shanduka in his youth and on the National Executive Committee of and a trustee of Mabinda which held a 26% stake in the the ANC. Makgothi was also Chief Whip of the National company that would provide the gambling infrastructure Council of Provinces.46 for the National Lottery (Louw and Ronald-Louw 2008: The new Board appointments under the Presidency 102). Gidani, the second licensed operator of the Lot- of Jacob Zuma appear no different: the new chairperson, tery has ‘considerable current and past ANC leadership Alfred Nevhutanda, was the former chairperson of the as well as persons closely connected to the South Afri- ANC in Limpopo and was one of the key fundraisers for can state’ (Ibid.). Beneficiaries of the deal include Bon- the ANC’s 2009 election campaign in Limpopo. At pre- gani Khumalo (former CEO of Eskom and chairperson of sent, Nevhutanda, as Executive Director of Coal of Africa Transnet), Chris Nissen (former leader of the ANC in the – a mining company that is planning to mine in the Ma- Western Cape), Cyril Ramaphosa, Max Sisulu (Chaiperson pungubwe world heritage site, is in the midst of a conflict of the ANC’s Economic Transformation Committee and between the mining company and the Venda community. Speaker of Parliament) and Brigalia Bam (Chairperson of Part of the conflict involves Nevhutanda’s association the Independent Electoral Commission) (Ibid.). with the King of the Venda, Khosi Ramabulana, which It is difficult to determine whether members of the will see him personally benefit from the coal mining deal Board have the necessary skills to play the regulatory by getting a share of the investment.47 Despite all of this, and advisory role, in respect of managing grant disburse- Prof. Nevhutanda’s appointment has been welcomed for ments, that is legally expected of them. This is because the dynamism he is seen to bring.48 their full curriculum vitae have not been made public. The Obed Shabangu was on the ANC’s election list for the Board’s performance in relation to governance over the 2004 election. Portia Loyilane is currently a non-exec- National Lottery grant disbursement function has been utive director of the Amathole Economic Development poor. Some of this lack of performance can be attributed Agency, the economic development arm of the Amat- to the narrow way the Board has interpreted its legisla- hole District Municipality in the Eastern Cape.49 tive mandate in relation to grant disbursement.

44 Sunday Times, 21 August 2005 accessed at www.armsdeal-vpo. co.za/articles08/key_players.html 45 www.negotassh.co.za/george-negota/, accessed 7 March 2011. The other Palabora executive is Shelley Thomas. 48 interview with Gideon Sam, 6 August 2010. 46 www.sahistory.org.za/pages/people/bios/makgothi_hg.htm, 49 Amathole Economic Development Agency annual report, accessed 7 March 2011. 2006–2007; Amathole District Municipality Annual Report 47 ‘New twist in mine saga’, Mail & Guardian, 26 March 2010. 2007–2008. 33 34 MEETING THEIR MANDATES? T able 1:NationalLotteriesBoardMembers1999–2009 1999-2003 • Dr AlistairRuiters • • Dr ZavarehRustomjee Minister’s nominee • • • Joe Foster Chairperson • • • Shelley Thomas,charteredaccountant Other members after heresignedin2000) Director-General, DTI(replacedDrRustomjee and Industry Special advisor totheMinister ofTrade Trade andIndustry Former Director-General,Department of Former trade unionFormer trade leader Telecommunications Labour, PublicEnterprisesand Chairperson of the SelectCommittee: of Provinces ANC memberofthe NationalCouncil Partners Inc Former partneratIanPierceand Investment Holdings Group Financial Manager forUbambo Mining Company Non- Executive Director, Palabora

2003-2008

• Brian Muthwa • Astrid Ludin • • in 2007) (replaced MsLudinaftersheresigned Director ofLegislative Drafting, DTI and CorporateRegulationDivision,DTI Deputy Director-General, Consumer Joe Fosterreappointed Shelley Thomas reappointed 50 52 51 50 the ProvincialExecutiveCommittees (MECs)responsiblefor thatfunction. The jointmeeting oftheMinisterfor aparticularportfolioand theMembers of There wasaone yeardelayinappointing the2009Board. During thistimetheMinister’snominee resignedagain. The Board’stermwasextendeduntil 2008untilanewBoardwasnominated. 2009 • • • Chairperson) Prof. AlfredNevhutanda(Non-executive • Zodwa Ntuli • Mathukana Mokoka mining company E (Jeff Radebe) advisor totheMinisterofTransport erved onTransportServed MinMEC Distribution Agency Member ofArtsandCulture and CorporateRegulationDivision,DTI Deputy Director-General: Consumer African Women CharteredAccountants 51 xecutive Director ofCoalAfrica 52 as

Table 1 cont.: National Lotteries Board Members 1999–2009

1999-2003 2003-2008 2009 Other members continued

Adv. Nceba Dukada Adv. Dukada was replaced by George Negota • Advocate of the Supreme Court of Transkei George Negota after his term expired. • ANC Department of Manpower • Member of the Road Accident Fund (1990-1992) • Acting Judge on several occasions • Owner: Negota SSH [legal practice] • Legal representative for the State Attorney • Non-executive board member of at the Truth and Reconciliation Commission Palabora Mining Company hearings Norman Axten Norman Axten reappointed Obed Shabangu • Fellow of the Institute of Bankers • Experience with National Home • Former President of the Institute of Bankers, Builders Registration Council, South Association of Mortgage Lenders African National Civic Organisation and • Former CEO of Banking Council conservation bodies Nora Fakude-Nkuna Nora Fakude-Nkuna reappointed Ms NEP Loyilane • Chairperson of Bohlabela Wheels (first • Masters in Philosophy in Disability black-owned company to be accredited by Studies Armscor) • Non-executive Director of Amathole Economic Development Agency Henry Makgothi appointed as 7th member Henry Makgothi reappointed Prof. Govin Reddy of the Board in 2000. • Professor and Director of the Sol • Former President of ANC Youth League Plaatje Media Leadership Institute at • Founder of Chancellor House Holdings, ANC Rhodes University business arm • India Country Manager of the • Director of Ukwanda Investments International Marketing Council • Chairperson of Zonkikizwe Investments of South Africa

35 36 Funding Practices of the NDA and the NLDTF 53 Figure 7: NLB2000. Organisational structureoftheNLB vices andotherlotteries( funds, operations and compliance, personnel, player ser ture inwhich 2000 included departments to manage the process moreeffective. structuring the NLB to make the grant disbursements governance and accountability of the DAs,aswellre and approach that the National Lottery ought to take, bursements especially in relation to the funding strategy Minister on how to improve the functioning of grant dis- the Board, Prof. performance for reasons given above. Together with appear to form partof the measurement of the CEO’s respect ofgrant disbursements from the NLDTFdoesnot clerical functions of the Board. and administrative financial, all of performance the for (a)) stipulates that the CEO is accountable to the Board and stillholds the position. The LotteriesAct(section 7(1) Prof. Vevek • The Boardand the CEO set up an organisational struc -

The ChiefExecutiveOfficer Ram wasappointed as CEO of the NLB in 1999 Ram has made recommendations to the 53 figure 7 However, performance in ). - - from 17to107in2009.Itcurrentlyhas120employees. grant agreements. for reading funding reports to assess compliance with Operations and Compliance department is responsible functions of the NLB. With respect to grantmaking, the actions of both the gambling and grant disbursement rangements including grant agreements and monitoring is responsible for legal issues such as contractual ar- The Operations andCompliance department of the NLB then distributed for ‘good causes’ in five categories: five in causes’ ‘good for distributed then the Minister. The balance of the money in the NLDTFis (Louw & expenses of the Board – less than 2% of its annual income erator. and penalties that have tobepaidbythelicensing op ing to theNational Lottery, forexamplelicensing fees tery is paid into the NLDTF as well as any other funds ow- ticket salesbythelicensedoperatorofNational Lot reporting toParliamentontheNLDTF. legislation also provides that the NLB is responsible for to cover the expenses of the NLB (section 22(2)). The in trust by the board for distribution to good causes and the board’ (section 22(1)) and that the fund will be held NLB, that the NLDTF will‘vestin and be administeredby 21(1) stipulates that the NLDTFwillbemanaged by the tribute the net proceeds of the National Lottery. The NLDTF is established by 4.3.2. 54 Since 2001, the number of NLB staff members grew members staff NLB of number the 2001, Since The biggest part ofthemoney generatedthrough sale revenueinto the NLDTF. age itpaidintothe NLDTF.Gidanipaysaflatrateof 34%ofticket sliding scalearrangement withtheNLBinrespectof thepercent Uthingo paid30% ofitsticketsales althoughithadacomplicated 54 TheNLDTF then disburses money to cover the Distribution Trust Fund The NationalLottery Ronald-Louw 54) –afterconsultation 2008: with Section 21 of the Act to dis-

Section - - - Private, SocialandotherLotteries charities; sport and recreation; arts, culture and heritage; to show that they were in ‘imminent danger of closing reconstruction and development; and ‘miscellaneous’. down because of a lack of financial support’ (NLB 2001: In 2000, the Minister determined that at least 10% of 8). The Minister made use of the Emergency Fund to the NLDTF funds would have to be allocated to each of make over R4 million worth of grants to 80 organisations. the following: the RDP fund; charities; sports and recre- The RDP category has been problematic for the NLB ation; and arts, culture and the national historical, natu- as no distributing agency has ever been appointed to dis- ral, cultural and architectural heritage. No more than tribute funds in this area and no criteria for funding were 10% could be allocated for any other purpose that the ever defined. In 2003 and 2004 15% of funds were made Minister determined would qualify for funding.55 These available to the RDP fund but never distributed and no minimum amounts are set by the Minister in consultation call for applications was made. In 2003, the NLB made with the NLB. Data on funds allocated to the DAs since a submission to the Minister proposing an amendment 2003 in the various categories is presented in table 2.56 to the Lotteries Act which would allow the reallocation of funds from the RDP programme to ‘special purpose 2003 2004 2005 2006 2007 2008 2009 expenditure’ which would include funding to projects in- RDP 15% 15% 0% 0% 0% 0% 0% volved in education, health and crime prevention (Louw Charities 36% 36% 45% 45% 45% 45% 45% and Ronald-Louw 2008: 61). Five years later, the DTI had Arts, culture and 22% 22% 28% 28% 28% 28% 28% not yet responded to the request. Table 2: national heritage The new Minister of Trade and Industry finally Percentage Sports and 22% 22% 22% 22% 22% 22% 22% responded by publishing a notice in July 2010 to say that allocated to recreation the RDP fund would not be allocated any further funds for funding 57 categories* Miscellaneous 5% 5% 5% 5% 5% 5% 5% disbursement. Instead he identified the priority ar- eas for funding in this category as development needs, * NLB Annual reports In December 2004, the Minister set the percentage al- enhancement of ‘social and moral responsibility’,58 and 2000-2009; Louw and Ronald-Louw location for charitable expenditure at not less than 45%, economic viability of programmes. The Minister deter- (2008: 24) arts, culture and heritage at not less than 28%, and sports mined that at least 50% of these funds would have to in- and recreation at not less than 22%. clude the expansion of home-based care services; train- Funds were not distributed to the funding categories ing and infrastructure development for the aged, the between 1999 and 2001 because the distributing agencies sick, orphaned and rehabilitation facilities; the provision were only up and running by 2002, two and a half years of educational facilities focusing on literacy, early child- after the establishment of the National Lottery and a hood development; vocational training and mentoring; year after the sale of the first Lotto ticket. In 2001, the and the promotion of local economic development.59 Minister directed the NLB to make a call for applications The Minister stated that funds would be made available for funding from organisations that had been affected to address rural development and educational needs.60 by the prohibition on scratch card lotteries. The once-off 57 government Gazette 33398, 20 July 2010. criterion used to select organisations was that they had 58 A highly loaded and controversial turn of phrase. 59 government Gazette 32802, 11 December 2009, reiterated 55 regulation 1070, Government Gazette 21696, 27 October 2000. in Regulation 33398. 56 No data in the form of a percentage was available for 2002. 60 ‘Lottery Fund regulations issued’, News 24, 22 July 2010. 37 38 Funding Practices of the NDA and the NLDTF tion if he or she believes that the allocation does not com- grants and can also prohibit the paying out of the alloca the NLB, can also impose conditions on the allocations of attached to the grant. The Minister, in consultation with pose for which a grant is to be made,and the conditions direction to the DAs as to who to make grants to, the pur- 32(3) of the Act gives the Minister the power to also give tion with government the relevant departments.Section funding priority areas which are established in consulta cupy full-timepositionsinthesectorstheyrepresent. make up the threeDAs arepart-time memberswho oc advertised callsadvertised fornominations. nominations put forward by the public in response to allocate funds to. These appointments are madefrom ernment department responsible for the sector the DAs tributing agencies in consultation with the relevant gov- committees oftheNLB. makes it clear that DAs are not juristic persons, they are the membersofthreeDAs.TheSAEPjudgment vincial sphere ofgovernment’. The Minister appointed money but not any department in the national or a pro- cy as ‘a person appointed by the Minister to distribute agen distributing a defines legislation The Act. Lotteries DAs aresetup in terms ofsections 28, 29and 30 of the 4.3.3. 62 interview,11August 2010. 61 on providingsupporttosustainablefoodproduction. have been covered by the inactive frastructure development or other areas which ought to light rural development are not intended to focus on in According to Prof.Ram,thenew regulations that high The Minister also issues directives to the DAs on the According to the Act, the Minister appoints the dis- 5 August2010;and Prof.Ram,11August2010. Interviews withDr Maitse,6August 2010;JeffreyduPreez, The distributingagencies 62 Theindividuals who RDP fund, but more

61 ------DAs put out calls for proposals. The chairpersons of the three DAs have said that the how They donothave the power forto call applications, decide gesting conditions to be imposed when money is granted. ‘limited toreceiving andconsidering applications, and sug- issue anylegallybindingguidelinesandtheirfunctionis: no regulatory or statutory powers to make any rules or ply with the conditions that have been set. TheDAshave tranches. in or once-off i.e. structured, be should payments how the CAO with instructions on the size of grants given and the distributor(Budlender2003). DAs thus the of staff the as same the regulator the of staff making the to support staff provide also NLB the of staffthe that prescribed has Minister the this, with deal to and DAs the of support staff for provide not does also ing responsible for the remuneration of the DAs. The Act from the NLDTF for this purpose, and with the Board be- to Atthe be covered. moment the NLB is taking money makes no mention of how the expenses of the DAs are to the Minister. As mentioned above, the Lotteries Act and are appointed by the Minister, they are accountable that, since the DAs act on the instruction of the Minister SAEP case, the NLB’s practice was informed by the view who the DAsaccount to and, until the outcome of the 65 interviewswith Gideon Sam,Prof. JaftaandDrMaitse, 64 63 causes ortodistributemoney.’ There is no specific mention in the legislation about legislation the in mention specific no is There Interview with Jeffrey duPreez, 5 August2010. that DAshaveno power toissuecallsforproposals. 6 August2010.The SAEPjudgmenthasnow madeitclear Board andOthers. Paragraph 34,S much 65 money AEP andOthersvs. TheNationalLotteries should be made 63 64 The DAs also provide available for

different

The DAs that were appointed in 2001 were the Charities backgrounds. There have been numerous problems in DA; the Arts, Culture and National Heritage DA, and the the Arts, Culture and National Heritage DA and members Sport and Recreation DA. No allocation has ever been have been less able to come to consensus on what the made from the RDP fund and the RDP Ministry, which priority areas should be. It has been alleged that there was responsible for administration of such moneys, was have been ‘bitter personal conflicts’ (Ibid.) within this disbanded many years ago. The disbursement of moneys DA due to the vastly different issues, sectors and activi- from the fund for ‘miscellaneous purposes’ is adminis- ties that fall within the ambit of its funding area. This DA tered at the discretion of the Minister of Trade and Indus- requires members who are scientists to make decisions try, with the Minister of Finance. about the orchestra or the ballet and artists to apply Although funding priorities are set by the Minister, themselves to issues of national heritage and environ- acting on the advice of the NLB, in reality, the NLB invites mental issues. Louw and Ronald-Louw (2008: 57) believe the DAs to make submissions on what the funding pri- that there are enormous structural problems in the Arts, orities should be and these are forwarded to the Minis- Culture and National Heritage DA. ter (Louw and Ronald-Louw 2008: 56). Once the Minister • The Charities Distributing Agency approves the funding priorities of each DA and has con- The Charities DA is responsible for receiving grant appli- sulted with the sector departments associated with each cations and allocating funds to the charity and welfare DA, a call for funding applications is made. The DAs meet sector. The members of the DA are appointed by the for two days in the year to discuss their funding priorities Minister of Trade and Industry in consultation with the and once consensus is reached, this is then forwarded as Minister of Social Development. The first Charities DA es- a proposal to the NLB. tablished in 2001 had 10 appointed members that were The DAs generally meet for 3–5 days every two weeks drawn from the charity and welfare sector. The second to adjudicate funding applications,66 but this depends DA appointed in 2006 had seven members. DA members on the need. The DAs are remunerated for each meet- are appointed for a five-year period although the Chair- ing they attend. In 2009, the NLB paid R3.374 million to person, Dr Maitse, is currently serving her second con- the DAs (NLB 2009a). Whilst it is not evident from the secutive appointment. The current members of the DA NLB annual report how many meetings each DA mem- are: ber attended in the year, it is possible that each of the 24 DA members received between R80 000 and R140 000 • Dr Teboho Maitse (Chairperson); a year. • Dr Joyce Matube (Deputy Chairperson); According to Louw and Ronald-Louw (2008: 56), the • Penelope Beck; Charities DA and the Sports and Recreation DA have Margaret Grobbelaar; been relatively well-managed and are able to reach con- • sensus on their priority areas for funding. The Sports and • Musa Madonsela; Recreation DA has a far more diverse membership than • Arthur Magerman and the Charities DA where the members share similar NGO • Gordon McDonald. 66 Interview with Jeffrey du Preez, 5 August 2010. 39 40 MEETING THEIR MANDATES? interview,6August 2010. 67 in 2007,hadninemembers, namely: members appointed in 2001. The second DA, appointed five had DA Recreation and Sport first The public. the by ister ofSportandRecreationafternominations made ister ofTradeand Industryin consultation with the Min The SportsandRecreationDAisappointed by theMin • the country. to know what is going on in the charities sector all over vast experienceand access to other provincial networks the DA members are from of Most proposals’. funding different very the assess to necessary qualifications and skills of combination good in the social sciences. lawyer and the Chairperson with extensive experience a being one skills, financial with one workers, social ing in have workedthe NGO sector with three membersbe - According to Dr Maitse, the majority of the members table organisations. fare obligations on to the shouldersofandchari welfare engaged in work, therebyshifting welfare its own wel- Charities DA, the state is making grants to organisations ance on the state to becoming more self-reliant. With the grammes being aimed at moving people away from reli- ing with poverty; one which has seen government pro- in keeping with government’s shift in approach to deal- of charities’ (Louw & as a result of a ‘public outcry over a perceived neglect increase of percentage allocation to the Charities DA was The 2005. in 45% to 2004 in 36% from increasing location lion’s share of NLDTF allocations with its percentage al- Since its inception the Charities DA has the received Sports andRecreationDistributingAgency 67

Ronald-Louw 2008: 25).This is also She feelsthat the DA ‘contains a Gauteng but make use of their - - - interview,6August 2010. 68 ing thereleaseoftrancheandfinalpayments. approv- and reports final and reports progress on off ing function as Chairperson as adjudicating proposals, sign his Hedescribes ago. years ten established first was it background, Mr Samhas been a member of this DA since Chairperson. A sports activist for 40 yearswith an NGO By 2010, the DA had 11 members with • • • • • • • • • (Ibid.). interested parties to develop their own answers to this’ rightly so: ‘it is the responsibility of all organisations and listic way? Louw has not tried to provide an answer, and because they the address welfareof people in a more ho fare projects, or do the arts and sportsfunding deserve its funding be restrictedto only povertyalleviation wel- the NLDTF and the types of causes it should fund. Louw 12)(2002: raises somequestions about the roleof ing support for rugby and football, among other things. poverty situation vere was more of a priority than provid- people who felt that addressing

This category of funding much drew criticism from Danny Jordaan; Edwin Bennet; Dr JoePhaahla; Célest vanNiekerk. Kedi Tshoma (now deceased);and Jappie Sibanyoni; Gideon Sam; Motlatsi Keikabile; Hajera Kajee; South Africa’s se - very Gideon 68

Sam as Should - - According to Mr Sam, According to Jafta, the reduction of the number of DA members has ‘put additional pressure on the remaining ‘the National Sports Council urged for the National Lottery members to attend meetings in order to achieve the funds to be distributed directly via the sports movement, necessary quorum to take decisions’.71 but in the end the South African government took the lead This DA has been fraught with internal tensions be- and established [the Sports and Recreation DA].’69 cause of the complex nature of the three disparate areas The allocation to Sports and Recreation has remained at of endeavour that have been brought together under 22% of NLDTF funds for the past nine years. The DA makes one umbrella. In this DA artists sit across the table from it clear that its focus is on the provision of equipment and scientists who sit across from historians and architects the renovation and upgrading of existing infrastructure, and environmentalists each being asked to make funding not for new construction, and it also funds capacity build- decisions about areas they know little about. ing in sport. It encourages municipalities to include local- The Arts, Culture and National Heritage DA was allo- level sports and recreation facilities in their IDPs.70 cated 22% of funds when it was first established. By 2005, its allocation had increased to 28%. However, it remains • Arts, Culture and National one of the least effective DAs when it comes to distribu- Heritage Distributing Agency tion of funds. This has been attributed to the internal ten- The Arts, Culture and National Heritage DA was appoin- sions within the DA. Because of the vastly different ar- ted in 2001 by the Minister in conjunction with the Min- eas that have brought together under this one DA, it has ister of Arts and Culture with 12 members. In 2006, the become nearly impossible for the DA to reach consensus second round of appointments saw the number of on funding priorities, let alone who to grant funds to. members reduced to eight. They are: The internal conflict and its inability to reach consensus • Prof. Dorcas Jafta (Chairperson); has caused long delays in allocating and then disbursing • Dr Tanya Abrahamse; funds. As a result, some organisations have been threat- • Nicola Danby; ened with closure and others like the Johannesburg Fes- tival Orchestra took this DA and the NLB to court. • Pumla Madiba; • Eddie Mbalo; The Annual Report of the NLB (2007a: 12) offers by way of explanation for the delays in this DA: • Fundisile Mketeni; • Doreen Nteta; and ‘This sector might be seen to take longer periods in adjudicating and finalising applications. This can be Dr Razeena Wagiet. • attributed to the fact that the projects funded in this Two of these are no longer serving as members of the sector are larger and therefore requiring greater scrutiny DA. Prof. Jafta has served two terms as Chairperson. and time in making decisions.’

69 interview, 6 August 2010. 70 Public Hearing on the Budget Vote 17, Department of Sport and Recreation, 21 May 2008. 71 interview, 6 August 2010. 41 42 MEETING THEIR MANDATES? government Gazette 33398,20July 2010. 73 interviewwith Prof. Ram, 11August 2010. 72 keep thisfunddormant. As of July 2010, the Minister has taken the decision to the Minister in 2003 on how best to use the meantime, submissions have been made by the NLB to RDP category has not as yet been distributed. (Ibid.). The to the NDA has been mooted, no decision has been taken paid and, although the idea of this money being moved fund into which money from the RDPcategory would be 10). The Minister of Finance was supposed to identify a money for earmarked this can be allocated (Louw 2002: longer a clear basis for decisions to be made on how Programme but, in the absence of the abandoned the The ideaforthis category came afterthe government remained dormant since the Lotteries Act was passed. The reconstruction and development category has • against theDAmemberandhewassuspended. & vited in adjudicating the application in question (Louw tion that was headed up by a DA member who also in organisa an to made was that grant a over conflict a in There have been reports that the DA has been embroiled 2002 and 2003, R3million was given to the Miscellaneous category but not distributed. Between 2001 andMarch 2002, the closure of the scratch card industry. Between April by affected organisations 80 to million R4 about allocate nance. At the beginning of 2001, this fund was usedto and that is allocated at thediscretion of theMinister of Trade Ronald-Louw 57). TheNLB 2008: laidfraud charges The Miscellaneous category is the ‘emergency fund’ Other funding categories Industry, in consultation with the Minister of Fi- R63.92 million that has been allocated to the Reconstruction and Development R21.96 million was allocated to the 73 RDP, there is no RDP category. South African 72

In the - - 75 Ibid. 74 budget fortheCotlandsorphanage’. that the whether such an allocation was ‘fairandequitable’ given ety organisations. The Democratic Alliance questioned way means that less funding is available to civil soci been raised that diverting funds to state bodies in this audit on how these fundsspent. were Concern has also TradeUnions], with both organisations calling for an Alliance and COSATU [theCongress of criticism fromtheDemocratic has tosevere given rise 2010 grant to the National Youth Development Agency Youth Development Agency) is cause for concern. The lity, the National state bodies (such as the Commission on political reasons. The use of the public’s money to fund have been raised that this could be used arbitrarily or for Work Education 2009, to theNational to the Disabled People of tion; between 2006 and 2007 the Commission for GenderEquality – aChapter9institu Trust.and wasgiven Between20042005,R633 000to year, R17.42 million was given to the Children’s for the World Cup opening ceremony. The following R6.6 million was disbursedtotheUnitedBoard Cricket Sports Commission for the Commonwealth December 2010. Agency to hold its World Youth and donated Whilst it isgood to havean emergency fund, concerns Mail & Guardian Mail R950 40 million R40 was‘greaterthan the entire annual R40 million to the National Youth Development 000 was 000 given to the Association of Research Foundation. and Between 2008 74 , 15December2010. Institute.

Research Foundation and the National Recently, the National Lottery South Africa, and R4 million was disbursed 75 Student festival in South African Gender Equa- Games and R30 million Hospital Social - -

The statement made by the CEO of the NLB that money when requested to report on the decisions made and the in the NLDTF’s emergency fund could be used, for ex- amounts that have been distributed.80 The DAs are re- ample, to give the Department of Education the means quired to report to the Minister directly but the general to acquire portable classrooms is of equal concern.76 The consensus among all those interviewed from the Nation- NLDTF holds public money in trust; this is not govern- al Lottery is that these meetings seldom happen and are ment money to be used to fill gaps in standard budgets not scheduled on a regular basis. The NLB has described that should be financed by ordinary sources of govern- the autonomy of the DAs in terms of there being ment revenue. ‘no review, appeal or oversight procedure in which the The poor functioning of the DAs has been identified Board can oversee this distribution by the DAs to ascertain as one of the problem areas in the grantmaking process. that the DAs have followed due process as prescribed by Part of the problem is that DA members are not full-time the PFMA [Public Finance Management Act] in their adjudi- employees adjudicating proposals. Rather, they meet cation and allocation process.’ (Louw & Ronald-Louw 2008: for approximately 10 days a month. The Charities DA re- 64). ceives more than 4 000 applications per call; the Arts and Culture DA, which has only six active members, receives 4.3.4. The Central Applications Office, about 800 applications per call; and the Sports and Rec- Compliance Office and Finance Office reation DA with 11 members receives up to 3 000 appli- The CAO has been headed for the last two years by COO cations per call.77 According to Dr Maitse, the Charities Jeffrey du Preez, a former employee of the Department DA can ‘adjudicate approximately 120 applications in two of Labour. The Office is responsible for receiving fund- days when the adjudication [process] has been properly ing applications in terms of each call for proposals. Staff prepared’.78 However, the head of the CAO indicates that members screen applications to ensure that they are ‘on average the DAs can adjudicate approximately 100– accompanied by the necessary support documents and 200 applications per month and it therefore takes a sig- meet all other requirements, e.g. that they have been nificant number of months before all applications have signed and that the correct number of copies of docu- been adjudicated’.79 ments have been submitted. The CAO prepares files on A second problem has been the fact that the DAs op- each application the DAs need to adjudicate. erate autonomously in that, if there are delays in the ad- The NLB employs approximately 120 employees, judication process, they are not held accountable. They 80–90 of which work in the CAO. The COO reports on are also not held accountable for how and to whom they the CAO at least once a quarter and, when necessary, grant funds. The Chairpersons of the three DAs have in- monthly. dicated that they report to the NLB at least quarterly or Those applications that have been approved by the DAs for funding are sent to the Operations and Compli- 76 Presentation to the Portfolio Committee on Trade and Industry, ance division where grant agreements are drawn up. This 3 February 2010. division is also responsible for reading through progress 77 Interview with Jeffrey du Preez, 5 August 2010. 78 interview, 6 August 2010. 79 Interviews with Jeffrey du Preez, 5 August 2010 and Prof. Ram, 80 interviews on 6 August 2010 with Prof. Jafta, 11 August 2010. Dr Maitse and Gideon Sam. 43 44 MEETING THEIR MANDATES? grant applications.Thisisdiscussedbelow. andprocessing in screening efficiency ensure and cess changes in the CAO in an attempt to streamline the pro- cants havereported. appli that problems the to factors contributing as staff has identified high staff turnover in the CAO and unskilled sector or the process very well. The Minister’s nominee ted, and having to deal with people who do not know the applications, loss of documents that have been submit have been long turn-around times in processing grant ing process. Someoftheproblems experiencedbyC SOs of the problemareasin the National Lottery grantmak separate fromtheCentralApplicationsOffice. six tosevenemployees. Division, the DAsand the NLB. The Finance Division has progress reportshavebeenapprovedby the Compliance responsible for making tranche payments after interim rised by the Board. Staff members in this division are also been approved and grant payments have been autho processing grant payments after grant agreements have tery. TheComplianceDivisionhas10–12employees. ing and monitoring the gaming side of the National Lot the Compliance Division is also responsible for oversee the grant agreement. with compliance ensure to grantees of reports final and The new Chief Operations Officer has been making been has Officer Operations Chief new The The functioning of the CAO has been identified as one The Compliance Division and the Finance Division are The Finance division of the NLB is responsible for In addition to its grant functions, ------province. of each requirements financial the and province, each of tickets sold in each province, the population of the provincial and local interests including the number to take into account, when setting the funding criteria, all peoplein the country. The Minister is also required as well as the enhancement of the standard of living of interests moral and social financial, economic, regional, to reference specific with country the of development funding. Act) to provide directivesto the DAs on the criteria for The Minister is required (section 32(4)(b) of the Lotteries 4.4.1. 4.4 Grantmaking 81 closing down if theirapplications unsuccessful. were had to show that they at riskof were scaling down or ganisations that were applying for National Lottery funds or- that specified that DA only the was DA Charities the ple and people living with vulnerable groups (women, people, elderly disabled peo tions that working were with children, youth and socially In 2001,thefocus oftheCharitiesDAwason organisa • sessed intermsoftheirfinancialsituation. ects would have once implemented; rather theyas- were the content of the proposals or the impact that the proj- call for funding could not be assessed on the merits of This meant that proposals that submitted were in this (Social Development inthiscase),hasthepowertodo this. acting inconsultation withtheMinisterofrelevant portfolio make ruleswhich arebindingonapplicants.Onlythe Minister, The SAEPcase has madeitclearnow thatDAshavenopowerto Charities DistributingAgency Funding criteria He orshemust take into account the general HIV/AIDS). nthat same year, 81 - -

According to Louw (2002: 11): Dr Maitse has also noted that smaller, less experienced organisations have difficulty in accessing Lottery funds ‘This all but excluded from consideration any applicant and, although the new regulations on financial state- with reserve funding or investments of its own, regardless ments will help to open up the application process, the of the type of service they provided and flew in the Charities DA continues to promote partnerships and face of government’s general insistence that non-profit mentorships ‘where stronger, more experienced or- organisations put measures in place to help secure their ganisations partner with smaller ones’ although not all sustainability.’ partnerships work well ‘because the bigger, more well- For 2002–2003, the funding criteria for the Charities DA established organisations end up benefitting more than were still focused on receiving applications from organ- the smaller partners which was not the original intention isations working with children, youth and socially vul- behind the partnership’.84 nerable groups and with people living with HIV/AIDS. From 2004 to 2005 the focus areas, priority groups The focus shifted to community and residential pro- and the special condition of working partnerships re- grammes, capacity building and poverty alleviation in mained. In 2006, numeracy and literacy in ABET [adult under-resourced and under-serviced areas. It set another basic education and training], development of under- condition on organisations applying for funds, stating resourced service organisations, and early childhood that registered and established organisations were re- development were added as focus areas. The special quired to assist unregistered organisations or organisa- conditions and priority groups remained the same for tions without audited financial statements with their ap- that period. In 2007, with the new DA in place, new fund- plications by entering into a formal working agreement ing criteria were set. The new focus was on social wel- with them.82 This was in light of the fact that the DA had fare development programmes, ABET, after-school care moved away from expecting applicants to be registered programmes, and schools operating in poor rural areas NPOs with audited financial statements in order to make for the building of toilets, classrooms and fencing, pro- the application process more accessible to CBOs. In 2010, vided the applying organisation could submit substan- the Minister issued a new directive to make the funding tiated proof that funding was not available from the application process easier for first-time applicants by do- relevant provincial departments of education.85 The DA ing away with the requirement for audited financial state- maintained the working partnership clause for new ap- ments and putting in its place a requirement for financial plications. In 2009, the call for applications for funding statements signed by a registered accounting officer.83 provided the same set of funding priorities but included ‘government schools in the Inner City, Informal Areas, Townships and Rural areas’ that needed classrooms, toi- lets, fencing, social work, psychologists or school nurses and it made it possible for schools to submit applications for funding. 82 The SAEP judgment in respect of DAs making rules may apply here too. 84 interview, 6 August 2010. 83 ‘Lottery fund regulations issued’, News24, 22 July 2010; 85 The SAEP judgment makes it clear now that DAs may interview with Jeffrey du Preez, 5 August 2010. suggest conditions, not impose them. 45 46 MEETING THEIR MANDATES? tiary institutions and clubs for applications for funding. vincial academies of sport; municipalities; and schools, ter- bodies; national, provincial and regional federations; pro- DA wasfirstestablished. ing priority areas for this DA have not changed since the ple with disabilities, the and elderly the youth. The fund rural areas and vulnerable groups such as women, peo in people benefit to had organisations applicant of ects proj- and activities the that specified also DA Recreation sports kits;andupgradingofexistingfacilities. coaches and administrators; provision of equipment and officials, technical of training programmes; performance sport development; team hosting delivery; events; high The SportsandRecreationDA’s funding priorities are • 87 government Gazette 33398,20July 2010. 86 adult literacyandvocational training. ment services; and education focused on early childhood, disabled persons and substance rehabilitation and treat- home-based care services;development of facilities for funding must go to projects that include expansion of rected that at least 50% of funds available for good cause The Minister’s most recent determination in July 2010 di- In support of the 2010 FIFA Soccer World Cup initiative, facilities fortheunder-privileged. of elderly, disabled people and children as well as provide grant funds toprojectswhich improve thequality of life organisations. The philanthropic organisations are to trusts in addition to the usual charitable and benevolent and organisations conduit as identified been have which for funds tobegrantedphilanthropic organisations focus also ondevelopment. Thedirectiveprovides rural The Sportand According to the 2003 Annual Centre forCivilSocietyLaw( NLDTF Sportand Recreationpresentation, International Sports andRecreationDistributingAgency Recreation DA targets macro sporting www.iccsl.org Report, the ). 86 There is also Therea Sports and

87 - -

proved byFIFA andtheNationalLottery. ap and government the by identified areas local in fields part of a legacy project, to fund thebuilding of football proposals which fit into a bigger, long-term plan. This would have more long-term impact than supplying a lot plan. long-term a bigger, into fit which proposals the DA would like to encourage the submission of larger sess any proposal, however small. Mr Sam indicated that projects. sector are not comfortable with having to manage big small very because many of the stakeholdersin the sports and One of the challenges experienced by the DA for the is notthemosteffective way.’ the funding being channelled through government which lowed bythe other DAsandanattempt to compensate for ‘this notes that tions to submit proposals for National Lottery funds. country and uses the opportunity to encourage organisa extensively around He travelsthe Committee (SACOC). of the South African in the sportsmovementasmost of these aremembers person has thorough knowledge of the various partners where they know there is a need for funding. The Chair- movement and fromstakeholdersin geographical areas that proposalsthey activelyseekfrompartsofthesports and approach. According to the Chairperson of the as below. described & Raymond-Louw and allocates 2008) most of its money, cient DAs because it adjudicates proposals quickly (Louw bid. 89 I interviewwith 88 This DA has been noted as being one of the more effi- Sports and Recreation is that many of the project proposals are Recreation DA, the DA members areproactive in is a

fundamentally It is relatively time-consuming for the DA to as- Gideon Sam,6August 2010. Recreation DA granted Its success can be attributed to its Sports Confederation and Olympic different 89 approach 88 R187 million, as to the one Sports Sports fol- He - - of smaller organisations with smaller amounts for equip- The DA for Arts and Culture only approves partial funding ment. The impact of smaller grants could be enhanced in response to applications if the applicant has indicated through mentorships, but this would require the CAO that funding has been secured from other sources. If to proactively engage in facilitating such mentorships. some of the requested funding is earmarked to be spent Another approach to mentorship could be encouraging on luxury items, the DA can then decide not to fund such stronger organisations to include mentoring and collabo- luxury items. Otherwise this DA approves full funding. rating with smaller organisations in needy areas as part The understanding of the DA is that the Lottery fund- of their proposals. Organisations (or external project ing should be enabling for the applying organisation, so managers) providing such a service would expect to be partial funding is not ideal unless the balance has been remunerated for this, and Mr Sam said National Lottery secured from other sources. funding should allow for management fees to be part of applications where appropriate. 4.4.2. Funding requirements Funding applications to the National Lotteries Board are • Arts and Culture open to organisations that are registered as non-profit Within this DA there are three sub-sectors: Arts, Heritage organisations in terms of the Non-Profit Organisations (which includes cultural and natural heritage) and Envi- Act. The Sports and Recreation DA accepts applica- ronment. Its priority areas include: tions from local municipalities and schools in addition 1. Projects of national significance, inter alia tours, exhi- to sports clubs and sports organisations; the Charities bitions, infrastructure development and the restora- DA accepts applications from charitable and benevolent tion and acquisition of South African works. organisations that work with women, children, disabled 2. Development of the arts, heritage, indigenous know- and elderly people; and the Arts and Culture DA accepts ledge and environment in the more rural areas of the applications from art, environmental and cultural orga- country. nisations as well as orchestras and universities. 3. Creative development and the production of new In 2010, the Minister issued a directive that, for the works with a strong South African flavour. Charities DA, applications will also be accepted from 4. Festivals where there is support and partnership philanthropic organisations (conduit organisations and with the local community. trusts); the Sports DA will accept applications from or- 5. Film production. ganisations which promote the involvement of disad- vantaged communities in sports and recreation; and the 6. Public art linked to urban renewal. Arts and Culture DA will accept applications from organ- 7. Architectural, archaeological and living heritage con- isations that promote the arts, culture or the national servation/ preservation; indigenous knowledge sys- historical, natural, cultural or architectural heritage of tems and the development of heritage sites. South Africa.90 8. Biodiversity conservation; waste management; planting of indigenous plants and trees; youth envi- ronmental education; and youth activities that en- 90 government Notice 644, Government Gazette 33398, courage partnerships. 20 July 2010. 47 48 MEETING THEIR MANDATES? fairly equalopportunityto accessfunding.’ sure thatdeserving all and qualifyingorganisations have a sue around language barriers should be addressed to en- it and because the National Lottery funds are public funding, process. tions from participating in the National Lottery funding site also prevents under-resourced and rural organisa The accessing of application forms from the NLB’s web- interviewwith Dr Maitse,6August 2010. 92 interviewwith 91 tice ‘It isproblematic that the National Lottery does notinprac plication process: Charities DAagreethat language to theap is abarrier The Chairpersons of both the Arts and Culture DA and the release thenextpayment.’ also when itcomes tosubmitting the necessary reports to as ahindrance, both in terms of applying for funding, but ‘Language plays a big role, and Englishquite often works organisations toapplyforfunds: rural for difficult it makes English in made be to cation made in placed in newspapers. These applications have to be website aftercallsaremadethrough advertisements form which organisations can download from the NLB’s application an in filling by made be to have Applications cause ed inthe SouthAfricanproblematic Constitution.is Thisbe- [these] acknowledge it prevents English. Mr should Gideon Sam,6August 2010. be certain the accessible Sam notes that requiring the appli 11 official groups 91 to languages

from all South effectively which Africans. 92 are applying, reflect The is------address thecurrentimbalances. the roadshows have thenecessarybreadthanddepthto that the services which will be offered in connection with to really reach all needy areas. in need, and the concept will have to be expanded for it shows will only manage to target a fragment of the areas interview,6August 2010. 95 bid. 94 I 93 loted with the smaller grants. line the operational model, and the approach will bepi stream- and process funding the decentralise to is fices of regional the behind idea The office. each in staff four don (Eastern Cape) and Nelspruit (Mpumalanga) with lished regional offices in Polokwane (Limpopo), East Lon section wider of civilsociety, the NLB has recently estab To makethe application process more accessible to a the Companies and as SETAs [sector education and training authorities] and in conjunction with other regional DTI-linked offices such between 2011 and 2012. Some of the officesall provinces may be set up in offices regional fully-functional have to moving closertoCSOs.TheNLBisplanning the services thereby in Pretoria, office national the by offered being are which services the all offer to offices regional the for able to reach rural areas. is aware that the initiative will only be successful if it is COO The organisations. beneficiary of spread graphical National Lottery funding and to ensure a better geo support to applicants. The aim isto improve access to to raise awareness, provide information, and provide cessible was the launch of road shows in October 2010 fice (CIPRO)tokeepset-upcostslow. Interview with Jeffrey duPreez, 5 August2010. Another new initiative to maketheprocess more ac Intellectual Property 94 DrMaitse feels that the road 95 93

Thelonger-term plan is It is therefore important Registration Of------Application forms must be accompanied by the following In his press statements on the new funding directives, documents: the Minister indicated that the compulsory require- • The organisation’s constitution, articles of ment for first time applicants to produce audited finan- association or trust deed; cial statements when applying for Lotteries funds had been dropped.98 The CAO describes this in more detail Signed, audited financial statements for the • as follows: previous two years; • A copy of the organisation’s registration certificate; ‘The new regulations (and new accompanying guidelines) which came into operation from 30 July 2010 mean that A detailed budget; and • first time applicants from now on do not need to submit • A business or implementation plan. two years of audited financial statements, but can submit Every application made by an organisation has to be ac- financial statements which have been signed by a regis- companied by these above documents, even if nothing tered accounting officer. This amendment to the regula- changes in the organisation between applications. tions has been done in an attempt to make it easier and The SAEP judgment noted that in some instances the less costly for smaller organisation to apply for NL [National requirements of the National Lottery are illogical. If the Lottery] funding. The Call for Proposals in the Sports sector aim of requesting the constitution, articles of association will be the first to use the new regulations and it is expect- or trust deeds of an organisation is to assess whether the ed to have a positive impact, especially for the success rate aims and objectives of the applying organisation meet of smaller organisations. The new regulations also state the funding criteria of the relevant DA, then this must be that applicants which have been previously funded by the gleaned from all the other supporting documents, such Lotteries only need to submit one year of audited financial as annual reports which will give a better picture of what statements, as the Lotteries would have already received the organisation does. Mr Sam agrees: the audited financial statements for two years as part of the first successful application. Also, previously funded ‘the CAO hides behind the letter in [of] the Act in the sense applicants do not need to resubmit founding documents that it does not engage at all with assessment or content unless these have been amended since the last successful issues...[with] the CAO [playing a] more proactive [role] in application, as the Lotteries should have these documents 96 engaging with applicants.’ in the previous application file. It is important to make the The Judge found that the NLB applies the requirement distinction between a previously funded applicant and [a] for audited financial statements inconsistently and only previously [previous] applicant who [which] has not been 99 appears to require this for applications requesting in successful in its application.’ excess of R750 000, and found the NLB’s ‘dogged insis- tence upon “audited” financial statements was unduly rigid and consequently unreasonable’ and unfair.97

96 interview, 6 August 2010. 98 ‘Lotteries fund regulations issued’, News 24, 22 July 2010. 97 sAEP case, paragraph 49. 99 Interview with Jeffrey du Preez, 5 August 2010. 49 50 MEETING THEIR MANDATES? motivation fortheproposedapplication: requirements have been met, the DA then looks at the not determined by the DA itself. Once the mandatory These requirements aresetin the Act and are therefore interviewwith Dr Maitse,6August 2010. 101 100 • • • • • • • have beenmet: requirements mandatory following the that checks first Before itcan consider an application, the CharitiesDA • checks’. reference through ‘thorough checks... including site visits and ments as perthe new requirement will haveto go Smaller organisations that do not submit audited state- audited financial statements as one of the requirements. checklist that accompanies funding applications still lists not appear to have keptpace with these changes. The

‘Lotteries fund regulations issued’, News24,22July2010. The CharitiesDA Why doestheorganisationneedfunding? Has itsubmittedappropriatefinancialstatements? Has itsubmittedavalidregistrationcertificate? Does theorganisationhaveaproperconstitution? terms ofgovernance? in strong sufficiently not is which organisation an of reflection a it is or appropriate this Is funds. release Some organisations only two require signatories to tion? Aretheseadequate? What are the governance structures in the organisa What differencewillthefundingmake? 100 owever, the However,internal systems do 101 - its intendeduse’. portant that the DA is certain that the money will be put to applications. As the NL funding ispublicfunding, itisim- public criticises the time it takes for the NLDTF to assess ‘[This] of money. sums big handle can it that assurance sufficient provide A further criterion is whether the organisation can application: an in following the for looks specifically Arts for DA The ment. the govern- of priorities the reflect which Minister the based on The criteriaaretheinstructions coming from whether an application should funding receive or not. The Arts and Culture DA uses various criteria to assess • 103 Ibid. interviewwith Prof. Jafta,6August 2010. 102 • • • • • •

Arts andCultureDA What wouldbereasonablepaymentinstalments? items (suchasorchestrainstruments,etc)? applicant submittedthenecessaryquotesforbigger to andsupportstheproposedbudget?Has organisation submittedaworkplanwhichspeaks it containanadequatelevelofdetail?Hasthe How bigisthebudget,howspecificit,does will benefit? What istheorganisationplanningtodoandwho How strongisthemotivation? regard tofinancialstatements? Does theorganisationfulfilrequirementswith organisation? Is theorganisationaregisterednon-profit important 103 issue... 102 is often overlooked

when the According to Prof. Jafta, the Arts and Culture DA does outlining the application and documents received. The not automatically decline an application if something is grant co-ordinator makes an assessment of the execu- missing. It may be that the application fulfils the basic re- tive packs which are signed off by the sector manager quirements but that some detail is missing. The DA can and sent to the DAs for adjudication. The addition of a then decide to suspend the application and request the sector manager and sector teams headed by grant co- CAO to ask the applicant to complete the information, ordinators has recently been put in place to streamline after which the application will be adjudicated again. the processing of applications. It is hoped that over time the sector teams will become more knowledgeable • Sports and Recreation DA104 about their sectors. The Sports and Recreation DA takes a similar, flexible ap- The DAs receive between 800 and 4 000 applications proach. In some instances the Chairperson has approved per call and they meet for between six and ten days per an application where minor details were missing, such month to adjudicate applications. To speed up adjudica- as a signed constitution, with a note requesting the CAO tion and deal with this bottleneck in the system, a pro- to obtain the missing document before the grant agree- posal has been made to appoint the DAs as full-time ment is drawn up. This helps to cut down the number of National Lottery staff. Prof. Ram has expressed doubt times an application is sent to the DA for adjudication. about whether certain DA members who currently hold full-time jobs in other organisations will agree because it 4.4.3. Processing applications may mean a loss of income for them, but the chairper- Applications are received by the CAO where they are sons of all three DAs have welcomed this suggestion.105 pre-screened and a check list applied to ensure that all Once applications have been adjudicated, the suc- required supporting documents are present. The check- cessful applications are sent to the Operations and Com- list, application and supporting documents are put into a pliance division for grant agreements to be drawn up. file and bar-coded. The file is sent to an external service Once these are signed by the Chair of the relevant DA and provider for scanning. Although this increases the risk of by the successful applicant, the Finance Division ensures documents being lost and slows down processing, the that payment is made to the grantee. The Compliance Di- CAO does not have the capacity to do in-house scanning. vision checks progress reports against the grant contract The file comes back in CD format which makes it easier and the Finance Division continues to make payments, if for both the CAO and the DAs to further process the there is more than one instalment. application. The new regulations stipulate that an applicant must After applications have been scanned, they are re- be informed about whether an application has been suc- ferred to the relevant sector team – charities, arts or cessful within 30 days of the DA making its decision. The sports. There is a sector manager for each application COO does not foresee any difficulty in adhering to this type, and each sector has a team of junior grant officers timeframe as long as the DAs inform the CAO promptly headed by a grant co-ordinator. The junior grant offi- about their decisions. The new regulations also state that, cer in the team prepares an executive pack for the DAs

104 Interview with Gideon Sam, 6 August 2010. 105 interview with Prof. Ram, 11 August 2010. 51 52 MEETING THEIR MANDATES? nterview with Prof. Ram,11August 2010. 108 I 107 Ibid. 106 a possibilityofdelaysatthatpointintheprocess. the progress reportsagainst the grant contract. There is from the Compliance Division after they have checked feedback received have they when DAs the by off signed delays caused by the DAs. Tranche payments have to be will not be aproblem for the NLB as long as there areno tions must be made within 60 days of the approval. This when grants have been approved, payments to organisa by other divisions. proved its functioning, there may still be delayscaused the CAO. This means that even though the CAO has im- the Compliance Division do not fall under the control of agreements and payments since the Finance Division and processing of applications including preparation of grant to control and implement an timeframe forthe overall dently oftheotherdivisions. including the fact that the DAs plan their work indepen difficult, timeline clear a to committing makes process mechanisms involved in the applications and funding being the key problem. The separation of the various and points to the structure of the grantmaking process as which determine turnaround times forthe processing to control the factors would make it easier forthe COO drafting of grant agreements belocated in the CAO. This suggested that the responsibility for sitevisitsand the has COO the effective, more CAO the make to attempt are currently not part of the tasks of the CAO. In an progress reportsagainst grant agreements. Sitevisits (though this does not happen regularly)andcheck draw up grant agreements, do site visits to grantees gaming side of the National Lottery. Itisalso meant to which has 10–12 employees,andmonitors oversees the The COO and head of the CAO says that it is difficult is it that says CAO the of head and COO The It isalso problematic that the Compliance Division, Interview with Jeffrey duPreez, 5 August2010. 107 The CEO agrees with this analysis 108

106 - - documents, at which point applicants have to resubmit two years, has contributed to the CAO losing application The lengthy quired. turn-around time, sometimes up to were making decisions on what documentation was re isations being turned down because unskilled people DAs ended up with incomplete applications or organ to see. happening, though not always as quickly as he would like aware of the needto improve structures andchanges are of the applications.new Board is According to the COO, 110 109 edge and proper training to do the work. the job and therefore didnot have the necessary knowl where people involved in screening were often new on as being a contributing factor, leading to asituation turnover of those responsible for screening applications staff high the identified She CAO. the in lay process tion observed that a critical problem in the funding applica ter’s previous nominee on the NLB, Nomfundo Maseti, ance can on be addedto its responsibilities. The Minis CAO beforemorefunctions such as monitoring compli more needsto be done to improve the operations of the for abetterfunctioning grantmaking institution, much tive in that the NLB is responding to civil society’s plea applications areincomplete. to are requiredwait in the same queueasthose whose requirements the all satisfied have who applicants ment cants have met all the mandatory documents. At the mo fast-track applications to the DAs in cases where appli applications, the NLB is considering allowing the CAO to achieve a quicker turn-around time in the processing of ther aproposal issuccessful orwillberejected.To Whilst these changes are positive and construc According to theAct,only the DAscan whe- decide 3 February 2010. Presentation to thePortfolioCommittee onTrade andIndustry, Interview with Jeffrey duPreez, 5 August2010. 109

110 As a result ------documents, causing even lengthier delays.111 The com- 4.4.4. Fund disbursements bination of a high volume of applications and unskilled A percentage of the proceeds of lottery ticket sales is people in the screening process has resulted in a bottle- paid into the NLDTF by the licensed operator. Uthingo neck in the funding application process and could be an had a sliding scale arrangement which averaged out to explanation for the disarray that seems to characterise 30% of ticket sales while Gidani pays a flat rate of 34% of the application and distribution process. ticket sales into the NLDTF. Between 2000 and 2007, the Against this background, it would make sense to put NLB had over R6 billion of National Lottery funds at its in place a strategy for staff retention before committing disposal (Louw & Ronald-Louw 2008: 21): to the training and capacity building of CAO staff. The • R10 281 278 in 2000 addition of sector management teams will only work to R428 524 367 in 2001 speed up the process if they become specialists in the • sectors they are serving. COO Jeffrey du Preez is current- • R834 459 258 in 2002 ly lobbying for the sector teams to be given the task of • R1 030 379 875 in 2003 monitoring grants through site visits. • R991 332 353 in 2004 The Chairperson of the Sports and Recreation DA says • R1 037 438 000 in 2005 there is also a need to • R1 263 036 000 in 2006 ‘change the attitude among big parts of the staff employed • R1 290 961 000 in 2007 in the National Lottery to service applicants (prospective In 2008, R553 million was paid into the NLDTF and in and successful). Most of the staff lacks passion in what they 2009, the figure was R1.4 billion. This brought the total do and they do not understand the difference they can amount available for disbursement to around R8 billion. make to communities if they do their job well. For most of the staff, the work is just a job but nothing which they are Table 3 breaks down funds allocated to each DA between passionate about.’112 2000 and 2009 and the amounts that were actually disbursed during this time. He has proposed that each sector be staffed by people who have a passion for the sector they are dealing with, for example, the Sports and Recreation sector team should be staffed by sports activists – people with a pas- sion for sports and recreation.

111 Ibid. 112 interview with Gideon Sam, 6 August 2010. 53 54 MEETING THEIR MANDATES? T able 3: Year/DAs 2002 2006 2005 2004 2003 NLDTFdistributionbysector 114 National Heritage Arts, Cultureand Charities T Miscellaneous Sports andRecreation Miscellaneous Sports andRecreation Charities Arts, CultureandNationalHeritage Charities Total Charities Total T Miscellaneous Sports andRecreation Sports andRecreation Arts, CultureandNationalHeritage Total Miscellaneous Charities Arts, CultureandNationalHeritage Sports andRecreation National Heritage Arts, Cultureand Miscellaneous otal otal 113 R million 1 406 1 694 1 811 Amount available 869 368 398 364 364 474 595 507 762 375 373 225 225 815 155 99 99 85 83 22 91 51 for distribution Percentage 100 100 100 100 100 45 45 26 26 26 28 26 26 26 28 42 42 22 22 41 6 6 6 5 5

Beneficiaries Number of 2 039 2 254 1 954 3 351 1 819 1 325 1 051 1 971 1142 389 407 955 795 750 265 287 220 742 535 192 0 2 1 1 1 R million 1 258.3 1 205.2 1 273.3 409.6 505.0 625.6 389.2 228.8 344.2 735.6 375.4 252.4 222.6 310.4 102.8 170.7 613.1 211.1 48.1 17.4 71.7 9.6 0.6 9.3 Amount allocated 0 Percentage 104 103 103 103 0.7 66 66 69 90 49 94 94 65 85 59 45 76 70 77 72 10 19 21 71 0 Table 3 cont.: NLDTF distribution by sector113

Year/DAs114 Amount available Number of Amount allocated for distribution Beneficiaries R million Percentage R million Percentage 2007 Arts, Culture and National Heritage 598 28 117 235.0 39 Charities 962 45 689 428.2 45 Sports and Recreation 470 22 55 117.7 25 Miscellaneous 107 5 2 34.0 32 Total 2 137 100 863 814.9 38 2008115 Arts, Culture and National Heritage 586.5 28 46 170.3 29 Charities 942.5 45 362 380.2 40 Sports and Recreation 460.7 22 613 422.4 92 Miscellaneous 104.7 5 0 0 0 Total 2 094.4 100 1 021 972.9 46 2009 Arts, Culture and National Heritage 949.8 28 77 263.8 28 Charities 1 526.5 45 653 565.3 37 Sports and Recreation 746.3 22 139 596.6 80 Miscellaneous 169.6 5 1 1 1 Total 3 392.2 100 870 1 426.7 42

113 Adapted from Louw & Ronald-Louw 2008: 24. 114 Figures for 2008 and 2009 are drawn from the NLB’s annual reports. 115 Because of the suspension of the National Lottery in the first half of 2008, a decision was taken to make only 70% of the total amount allocated to each DA available for distribution. 55 56 MEETING THEIR MANDATES? in2002,R99millionwasmade available fortheMiscellaneous 116 T period 2002to2009. picture oftheed performance of thethreeDAsfor to between 20052009. uted for good causes, and there was a steady decline distrib- been have funds NLDTF of 62% only 2002, Since able 4: 2002 T 2009 2008 2007 2002 2005 2004 2003 2006 2006 2005 2004 2003 2008 2007 T 2009 otal otal Year Fund andR71.7millionwasactually distributed. Breakdownoffunddistribution2002-2009 Arts, CultureandNationalHeritageDA Beneficiaries Number of 2 254 1 946 8 431 1 325 1 051 1 142 689 955 653 265 362 287 220 742 192 117 46 77 Charities DA Table 4presentsadisaggregat (R million) allocated Amount 3 562.4 1 802.5 625.6 263.8 380.2 228.8 344.2 563.3 428.2 375.4 310.4 102.8 170.3 170.7 613.1 48.1 505 235

116 Percentage allocated 66 ave 54 ave 103 103 66 66 49 94 40 65 39 45 76 45 28 29 37 77

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receives the receives largest amount of applications, is allocated DA This span. life eight-year its in funds available of 66% pears to beone of thebetterrunDAs,has only disbursed organisations and projects. The Charities DA, which ap that smaller grants are being made to a larger number of meaning increased, has beneficiaries of number the ly, with a declinein percentage distributed but, interesting of the new DA, the situation appears to be deteriorating Ministers of Trade and adequately didnot appear to ring alarm bellswith various structural, the fact that this DA was not disbursing funds efficient DA. Whatever its internal problems, be they personal or least the it making funds, allocated its of 54% funds. its persistent poor performance in respect of disbursing waythis the DA has been structured, although this is no excuse for to arerelated ofwhich some difficulties, Heritage DA has been set back by internal tensions and ciaries receivinggrants.CultureandNational The Arts, benefi of number and distributed funds of percentage the othertwoDAshaveshowndeclinein a markedboth While the 2002 T 2009 2008 2007 2003 2006 2005 2004 otal Year In its eight years, it has only managed to disburse Sport and Beneficiaries Number of 3 148 389 407 795 750 613 139 55 0 Sports andRecreationDA Recreation DA has performed well, Industry. (R million) allocated Amount 409.6 596.6 389.2 422.4 2 399 252.4 117.7 211.1 0 Since the appointment

Percentage allocated 71 ave 104 103 80 69 94 92 25 0 - - - 45% of the NLDTF’s funds for disbursement, but has only Dr Maitse said this adds to the sometimes tense been able to disburse a fraction of its total budget. Its relationship between the Lotteries and some parts of disbursements have also been on the decrease since civil society. However, some of the tensions between civil 2006 with the Charities DA only being able to disburse society and the NLB could be as a result of components 37% of its funds. It is understandable that the Sport and of the NLB, such as the DAs, holding the incorrect view Recreation DA disbursed funds more rapidly in the run-up that these funds are government funds when in fact to the 2010 FIFA Soccer World Cup when South Africa’s these are public funds which come from the purchase of attention was focused on preparing the country to host lottery tickets. The tension is further compounded by the this event. fact that the NLB does not disburse these public funds efficiently. The Chairperson of the Charities DA believes that CSOs The head of the Arts and Culture DA says some de- add unreasonably to the delay in processing applications: lays in disbursing funds have been the result of high staff ‘some organisations for instance take up to four months turnover in beneficiary organisations, with the associ- to return the grant agreements, sometimes because their ated loss of continuity, impact and organisational man- immediate funding need has been solved or because key agement: staff has left the organisation leaving little capacity to im- ‘there are quite a number of organisations which have plement the Lotteries-approved project. However once the unclaimed funding sitting in the Lotteries and when the organisation’s need for funding re-emerges, the organisa- CAO enquires as to why the funding is not being claimed tion fails to understand that the Lotteries then takes time it appears that the organisations are unaware of the un- to process the application after the organisation has de- claimed funds due to the previously responsible staff mem- layed the process itself.’117 ber having left without proper handover. This is not only a She also says that some organisations appear to have a problem for the organisations (which risk losing out on the funding) but also for the Lotteries as it reflects badly on its ‘very strong and distorted culture of entitlement from ability to disburse funding.’119 which they simply expect to receive government funding as and when required, without feeling the need to give ap- Prof. Ram says another obstacle to achieving a higher dis- preciation back to the government. The Lotteries funding bursement rate is the DAs having to process applications is government funding and the recipients ought to at least that fall outside what the NLB funds, such as loans or acknowledge this and not only take it for granted. There funding for profit-making activities. Even though these are examples of organisations which year after year receive applications will always be rejected, they slow down pro- very substantial amounts in funding from the Lotteries but cessing because they have to be dealt with in the same which do not even mention the Lotteries as a significant way as any other application.120 contributor in its annual reports or financial statements.’118

117 interview with Dr Maitse, 6 August 2010. 119 interview with Prof. Jafta, 6 August 2010. 118 Ibid. 120 interview, 11 August 2010. 57 58 MEETING THEIR MANDATES? 121 allocations 2005-2009 T able 5:Provincial 2009. reports for2008and 27 andNLBannual Ronald-Louw, 2008: Source:Louwand 121 ticket salesthanfinancialneed. Table 5 shows the allocation per province in the was period 2005–2009morein line with than, forexample,LimpopoandMpumalanga. spread across provinces. areas. Acomplicating factor from a grantmaking point of view isthat CSOs arenot evenly statistics hide pockets of poverty in their urban townships, informal settlements and rural aggregated others, the than off better are provinces these show figures the Although come. the Western Capehavehigher ticketsalesbecause they have higherof levels disposable in population and the degree of need in each province. The wealthier provinces of tion is determinedby the Minister, taking into account ticket sales by province, provincial Each of thenine provinces is allocatedacertain percentage of each DA’s budget. The alloca • Western Cape National 2006 North West Northern Cape Mpumalanga Limpopo North West Northern Cape Mpumalanga Limpopo KwaZulu-Natal Free State Eastern Cape Western Cape Gauteng National 2005 KwaZulu-Natal Gauteng Free State Eastern Cape Gauteng and the Western Cape have the largest ticket sales, followed by KwaZulu-Natal. Provincial allocations R million Arts DA 44.3 94.7 30.3 76.7 32.7 13.4 31.5 11.6 11.5 11.2 8.6 0.8 5.9 4.3 0.2 2.8 2.6 80 73 3 Gauteng, the Western Capeand KwaZulu-Natal have moreCSOs Charities DA R million 165.2 120.3 132.2 56.6 54.6 90.7 29.8 92.4 45.5 78.3 55.2 53.2 22.3 13.6 21.9 17.5 27.1 17.1 22 15 Sport DA R million 139.4 155.6 49.9 49.4 30.9 20.4 20.4 26.4 35.4 28.5 26.7 23.4 35.5 37.2 34.1 21.3 11.6 9.9 1.9 41 Miscellaneous R million 0.6 9.3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Gauteng and 309.3 297.9 227.4 106.2 T 163.5 222.3 124.7 105.1 69.6 83.8 40.5 45.4 49.7 55.8 38.2 31.9 67.1 295 otal 50 95 - - Table 5 cont.: Provincial allocations 2005-2009

Arts DA Charities DA Sport DA Miscellaneous Total R million R million R million R million 2007 National 8.9 87.9 67.2 34 198 Eastern Cape 8.4 37.2 5.1 0 50.7 Free State 1.7 14.9 0 0 16.6 Gauteng 127.4 112.7 21.8 0 261.9 KwaZulu-Natal 26.3 47.8 3.7 0 77.8 Limpopo 7.3 15.9 5.3 0 28.5 Mpumalanga 7 27.1 3.4 0 37.5 Northern Cape 2.4 16.5 3.1 0 22 North West 6.7 11.1 3.2 0 21 Western Cape 38.9 57.1 4.9 0 100.9 2008 National 11.5 146.4 126.9 0 284.8 Eastern Cape 13.1 8.5 25.8 0 47.4 Free State 0 0 38.4 0 38.4 Gauteng 62.4 38.5 43.8 0 144.7 KwaZulu-Natal 30.8 95.5 31.6 0 157.9 Limpopo 16.8 4.3 24.8 0 45.9 Mpumalanga 15 25.9 33 0 73.9 Northern Cape 0 7 30.4 0 37.4 North West 0 37.8 18.6 0 56.4 Western Cape 20.7 16.3 49.1 0 86.1 2009 National 46.6 41.8 376.9 1.0 466.3 Eastern Cape 36.1 63.9 17.4 0 117.4 Free State 9.3 36.6 17.1 0 63 Gauteng 41.8 224.9 105.1 0 371.8 KwaZulu-Natal 19.3 12 19.7 0 51 Limpopo 3.1 36.5 2.7 0 42.3 Mpumalanga 18 7.9 7.9 0 33.8 Northern Cape 2.5 15.8 8.9 0 27.2 North West 8 13.8 20.1 0 41.9 Western Cape 79.1 112.1 20.8 0 212 59 60 MEETING THEIR MANDATES? because: Western Cape and KwaZulu-Natal. This, she feels, is partly applications coming from organisations in lance in provincial allocations is a result of the majority of According to the headof the Charities DA, theimba- count (Louw&Ronald-Louw2008:63). the Minister to take provincial and local interests into ac therefore proposed that the Act be amended to direct the needs of poorer, provinces. lesswell-resourced funds to be linkedtothesaleofticketsis not addressing teries Actthatthe requires provincial distribution of interviewwith Dr Maitse,6August 2010. 122 • • • located totheWestern Cape. organisations more received than twice the amount al- DA funding allocations at an were all-time low, national single province in every yearexcept 2007. this period has been larger than the allocation to any capacity meanstheyhaveagreaterneed. though their lack of infrastructure and organisational poorer provinces have considerably received less, even when the size of total disbursements, except in 2006 and 2009, Natal have been the top three provinces in terms of the In this period,

The NLB has recognised that the section of the Lot The amount allocated to national organisations over general. there isanimbalanceinthe access tofundingin of theseprovinces;and many nationalNGOshavetheirheadofficesinone density; these provinceshavethehighestpopulation Eastern Cape madeit into the top three. The 122 Gauteng, Western Cape and KwaZulu- In 2009, when Gauteng, It has

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looks atthesuccessful applications.’ by the NL. This picture becomes even more distorted if one the population in South Africa in the applications received interview,6August 2010. 125 124 Ibid. 123 Ibid. funds. Lotteries so that all provinces can get its fair share of the media should be usedto spread knowledge about the have easy access to knowledge and information and the vantaged partofthepopulation. funds more accessible to the previouslyandstilldisad- the make to effort concerted a makes funds, Lottery of ter, who carries overall responsibility for the distribution applications’. very reactiveroleof assessing and deciding on received tively rectifythis issue, as theAgency has been given ‘the Dr Maitse saidtheCharitiesDAhaslittlescope very to ac not very dominated by white people. There is therefore still stem from the Dutch Reformed Church and many are still ‘Many of the traditionally strong and well-established NGOs strong andwell-establishedNGOs. At present,the National Lottery tends to fund already Prof. Jafta believes that the poor provinces do not a good 125 Theroadshows intend to achieve this objective. enough 124 Inherview,it is necessary that the Minis reflection of the 123 racial

composition of - - There are three key problem areas in respect of National pect and the gambling aspect of the Lottery is causing Lottery’s grantmaking function. delays in both functions. The Compliance and Finance divisions operate independently of the CAO and they 1. The autonomy of the DAs means that they are not play a critical role in the grantmaking cycle which falls held up to scrutiny by anyone. Although they are re- outside the control of the CAO. Further compounding quired to report to the Minister, these meetings are the lack of co-ordination is the fact that the DAs oper- not scheduled regularly and seldom take place at any ate autonomously. The SAEP judgment has determined time. The SAEP case has established that the DAs are that an application for funding to the NLDTF is an ad- committees of the NLB, that they are appointed by the ministrative action and is therefore subject to the pro- Minister and remunerated by the NLB, and that their visions of the Promotion of Administrative Justice Act. powers are limited to adjudicating grant applications The NLB has already put timeframes in place in respect and suggesting conditions on grants. The recommen- of communicating decisions on grant applications and dation made by the CEO and COO and agreed to by the on grant disbursements, but adherence to these time- Chairpersons of the three DAs has been to employ the frames requires a high level of collective planning and DAs on a full-time basis. This is expected to alleviate de- inter-departmental co-ordination. lays in adjudicating funding proposals and will facilitate issuing more than one call for proposals a year. The CEO, the CAO and the chairpersons of the DAs are in favour of providing support for the development of spe- Delays in the application process have been partly 2. cialist staff members who are knowledgeable about the due to problems in the CAO, including poor process sector they work in and feel passionately about its issues. management and a lack of skilled staff. The judge in It is possible that sector-specific staff may also do site visits the SAEP case expressed strong criticism of NLB’s in future. management of its grantmaking. The head of the CAO A widely-held opinion expressed in interviews was that has initiated systems within the CAO to streamline the there is too much distance between the Minister of Trade process. The appointment of sector teams is a posi- and Industry and the NLB. This might be seen as positive tive step towards streamlining the process and holds in that the Minister does not exert political influence over potential for each DA to be served by staff with the Board and its decisions. However, as long as the DAs specialised knowledge of the sector. However, the head report to the Minister and seldom have meetings with him, of the CAO should consider what can be done to retain they are not being held accountable for their part, hamper- staff, build their skills and knowledge, and find ways ing the effective disbursement of Lottery funds. The fact to improve their knowledge of the sectors they are that the use of NLDTF moneys in the Miscellaneous fund working in. is subject only to the discretion of the Minister of Trade 3. The disconnected way in which the various grantmak- and Industry, in consultation with the Minister of Finance, ing mechanisms function has caused problems in their is a matter of serious concern. Another problem is locating planning and implementation. The fact that NLB staff the grantmaking function of the NLB in the Department of members provide support to both the grantmaking as- Trade and Industry where it is a low priority.

61 62 MEETING THEIR MANDATES? West, FreeStateandtheNorthernCape. North Mpumalanga, from come KwaZulu-Natal 11% remaining The (14%). and (9%), Limpopo (12%), Cape Eastern the from come applicants of 35% further A respectively). 24% and (30% Gauteng and WesternCape the from come ganisations bysectorisshownin or- of distribution The (11%). culture and arts heritage, in working those and (16%), organisations support and vice cation and training organisations (17%), human rights, ad- welfare and charity organisations (36%), followed by edu- tions in four sectors,with the biggest share coming from sought. funding of source only the this was cases of 18% in only sources of funding. Of allof the applicants to the Lottery, tions seeking Lotterysupportwere tocomplement other applica of bulk The events. one-off for were plications or ap (55%) of 6% Only (36%). duration in months 7–12 projects of projects term longer for were Lottery the to Lottery for funding. The majority of funding applications the to applied sample) total the of 81% (or ganisations Of the 226 organisations covered in this survey, 183 or- 4.5.1. civilsociety’sexperiences 4.5 As indicated in Eighty percent of applications came from organisa of theNLB National Lotteryfunds Description ofapplicantsfor , almost 55% of all applicants all of 55% almost 9, figure figure 8 .

- - - Figure 9: Figure 8: Provincial distributionofapplicants Sector inwhichapplicantorganisationswork 4.5.2. CSOs’ experiences of the application process Of the organisations that applied for National Lottery funds, 31% of these were successful in all of their applica- tions, and a further 42% successful in some of their appli- cations. As indicated in figure 10, 21% were unsuccessful in all of their efforts. Four percent of organisations noted that they had only recently applied, and had not yet been informed as to whether their applications were success- ful or not. Two percent of the 183 organisations provided Figure 10: Outcome of applications to the Lottery no response to this question. Approximately 25% of Gauteng and the Western Cape organisations were successful in all of their applications (figure 11). In KwaZulu-Natal the figure stood at just un- der 20% of applicants. In the remaining provinces the fig- ure was much lower. A similar trend was evident in rela- tion to organisations that have been successful in some of their applications. As indicated in figure 12, organisations working in the welfare and charity sector were by far the most success- ful with just over 40% of organisations being successful in all or some of their applications. This may be accounted Figure 11: Provincial distribution of successful applicants for by the fact that 45% of NLDTF funds are allocated to the Charities DA. The heritage, sport, human rights, and education and training sectors trail far behind.

Figure 12: Sector in which successful applicants work 63 64 MEETING THEIR MANDATES? scale ofoperation disaggregated by applications, successful inall which havebeen Organisations Figure 13: resourced towritesuccessful fundingproposals. be a consequence of national organisations being better biased towards national organisations, or it may simply ful in all applications. This might mean that the Lottery is tions. Only 10% of national organisations were unsuccess applica their of some in successful were 50% almost and applied for Lotteryfunding successfulwere in all applications that organisations national of 40% Almost ful. unsuccess been had which those of 10% up made only ful operatelocally. By contrast, national organisations of organisations whose applications unsuccess were 70% almost locally, operated applications their of some percentage of organisations that successful were in all or significant a Although organisations. national to pared Local organisations seem to be atadisadvantage com organisations andprovincialorganisations. ful in all of their applications split are betweennational 13 (figure level local a at operate 50% almost applications, Of the organisations that were successful in all of their ). Therestof the organisations that have been success ------(By levelofapplicationsuccess) Figure 15:Howdifficultistheapplicationprocess? Figure 14: have beenunsuccessfulonalloccasions. that organisations of 30% over just to compared as easy successful in all orsome applications found the process been have that organisations of 50% and 40% Between ganisations that have been unsuccessful on all occasions. or- of 30% to close to compared as difficult, very process successful in all or some of their applications found the been have that organisations of 10% than less 15), (figure However, if this is disaggregated by the level of success difficult and just over 10% found the process very difficult. 14). Twenty seven percent of applicants found the process to be (figure difficulty medium of or easy be to Just over 60% of applicants found the application process Howdifficultistheapplicationprocess?(Allapplicants)

Organisations that were interviewed said that they ac- Some organisations which had experienced difficulty in cessed application forms either from the NLB website or completing the Lottery application forms contacted the asked the call centre to post or e-mail application forms. call centre. Some of these had positive experiences of Application forms accessed by both means were accom- the call centre, and reported receiving good and useful panied by guidelines for completing the forms. Smaller, advice. One stressed the importance of forming relation- under-resourced organisations with no internet access ships with people at the call centre: found accessing application forms from the website to ‘We found the call centre staff helpful, especially where a be difficult. Some of these organisations requested the relationship has been built with a specific call-centre em- forms telephonically and found that it took the NLB a ployee... Otherwise you end up speaking to a number of minimum of two weeks to fax through the forms and different people every time you call... One of these emplo- guidelines. This delay put these applicants at a disadvan- yees with which a relationship has been created has even tage because the NLB works on a first-come first-served gone to the trouble of calling the director to update her basis. on the progress of an application. The call centre can assist Organisations were split in their views as to wheth- with administrative issues but cannot provide assistance er the guidelines were useful or not. Some felt that the when it comes to content matters.’128 guidelines were easy to understand but those whose ap- plications were unsuccessful in spite of using the guide- However, some organisations had very different expe- lines disagreed. The standard, generic nature of the riences with the call centre. One said: guidelines was also problematic for some organisations ‘We tried to get assistance from the call centre but have who felt that the guidelines ‘had not been adapted to several times been urged to travel to the call centre in take into consideration the specifics of the field in which Pretoria because the call centre person was unable to funding is sought’.126 Some organisations felt that the lan- help over the phone. Our co-ordinator has on a number guage was too technical and difficult to understand and of occasions travelled to Pretoria to move an application said that making the guidelines available only in English forward... to hand in an application to make sure disadvantaged people whose first language is not Eng- documents were not lost... to get a reference number.’129 lish, particularly people in rural areas. Some expressed the view that the guidelines failed to indicate what the Another organisation said that the structure of the NLB criteria for a successful application were and ‘the man- is a problem because applicants are only allowed access ner in which the guidelines are phrased makes it difficult to unhelpful call centre staff, and there is no access to to get a proper grasp of what the NLB requires in an ap- anyone who adjudicates applications.130 plication’.127

128 interview, 25 May 2010. 126 interview, 19 May 2010. 129 interview, 26 May 2010. 127 interview, 20 May 2010. 130 interview, 20 May 2010. 65 66 MEETING THEIR MANDATES? interview,20May 2010. 133 interview,4June 2010. 132 interview,4June 2010. 131 from theLotteryeveryyearbetween2002and2007. the application process a easier. Itreceivedfunding grant quired, it has the information on hand, and this has made Because this organisation knows what information is re easier. become has it forms, the in filling in experience process as a learning process and, now that they have application first the approached It effort. of level dium with the application process saying that it a required me- One organisation had positive interviewed experiences application start over all again if youwant to make additional edits. The section every time you have made edits and you have to you have made. This means that you have to print each possible ‘The application form is awful to work with as it is not the applicationform: tions were expressedaround the cumbersome nature of cation forms easytoaccess and tocomplete, but frustra- that had applied to the NLB for funding found the appli From the in-depth interviews, most of the organisations much helpatall.’ body ‘they are supposed to be generalists and able to help every focus areasas: funding onspecific advice specialised offer to able not are staff centre call the that expressed was opinion The consuming andfrustratingtoworkwith.’ who to calls; save form instead, the 131 is easy file they on to your don’t access computer seem but to 132 extremely be with able the to time- edits offer 133 - - -

tion detailed, precise andrelevant as itshouldbeifthe applica this means that the information in the proposals is not as [NLB] of the development outcomes requested by the NLDTF interview,26May 2010. 136 interview,4June 2010. 135 interview,20May 2010. 134 the ‘The form isgeneric andisnotadapted to the realities of Culture andHeritageDA: ing observation in respect of its applications to the Arts, One of the organisations interviewed made the follow numerous grantsovertheyears?’ [NLB] change over time such as trust documents. Does the NLDTF to repeatedly submit standard documents that do not ‘...it seems unnecessary to require from organisations complete theapplicationform. under-resourced organisations, it took up to a month to For difficult. was it than time-consuming more was form in week filling a the form, indicating that the cumbersome to nature of the up spent effort medium requiring Organisations that found the application form easy or some ‘The application forms: One organisation spoke about its anxiety around filling in ries ofprojectscalledfor.’ call other as thiscouldleadtoarejection...’ specific the requirements NLDTF sections hand, not cannot call keep [NLB] fields centre is be worried but a form transposed from file had you for on been and get about which clarification. us, 134 conflicting the adapted given filling to projects guidelines the 136 135 that in The to visual responses the are the we applicant, are form called specific arts have ambiguous incorrectly industry... when for. received catego on Some you the in - - - Of all of the organisations that applied to the Lottery, over 50% were required to submit additional information (figure 16). In about a quarter of the cases this was in- formation that the organisations had already submitted.

Following receipt of an application number, in over 65% of applications it took a further seven months or more to receive a decision from the Lottery on whether the ap- plication was successful or not (figure 18). Less than 25% of applicants received notice of a decision in less than six months.

Figure 16: Organisations required to submit additional information

4.5.3. Screening and processing of applications While 40% of applicants received an application num- ber within 2–6 months of submission, one quarter of applicants only received application numbers within 7–12 months, and a further 16% in 12 months or more Figure 18: Time taken for communication of a decision after receipt of application number (figure ).17 Almost 10% did not receive an application number at all.

Figure 17: Time taken to receive an application number

67 68 MEETING THEIR MANDATES? Box 2: half of2010,after thetournamenthasended,so thatallthefundingcanbespent thisyear. pardising the quality, but the project will not be finalised by the end of the World Cup. We will have to continue implementation into the second out by months several due to the NLB’s tardiness in approving the project. Our plan is to implement the project as fast possible without jeo- been included in the grant agreement and we thereforehad to on deliver the full set of deliverables, eventhough the timeline had been pushed the grant agreement, we received the first tranche of R1.5 million. The five deliverableswhich we proposed in our original project proposal had ments. The payment was tobemade in two tranches, and wewouldhavetosubmitreports. Withinofhaving quarterly three weekssubmitted agree- grant of set a returned and signed Wereceived, requested. funds the of 100% million, R2 nearly granted been had organisation our that NLB the from confirmation a received we 2010 March In system. the on logged been not had 2009 November in provided had we information proposed, could not be implemented successfully. time for implementation prior to the start of the World Cup. requested detail the same day. We made regular follow up telephone calls to the NLB to emphasise that the proposed project needed sufficient asked to were wait. phonically to make the NLB aware that it would have aserious impact on the project if implementation could not start in compared to our twopreviousexperiencesof applying for National Lottery funding. was approaching As September2009 we followed-up tele- indication of the consequences of taking a long time to make its decision. Within two months a we receivedreferencenumber. This was quick, September 2009, and another if funding only were to became available in November 2009.The two timelines included were to give the NLB an our experiencewith the NLB, we included two timelines for the implementation of the project: one if the funding to were bemadeavailable in the proposed activities if their applications successful. were NLB response time, thecall was publishedlate,giving very applicantslittle timeto veryput their proposals together as welltoimplement The NLB published a call for proposals during offorprojectsto the 2ndquarter2009related2010FIFA World Cup.Considering the normal A FIFA SoccerWorld Cupapplication the R20millionithadaskedfor.’ the one and a half years. In April 2010 it received a letter from Despite follow ups,the organisation received no newsfor for Charities funding inresponse to a call for proposals. than a year... InNovember 2008 weput in anapplication is very quick but in some instances it has taken more ‘Sometimes the process of getting a reference number numberand reference some have notone received at all. ganisations have waited up to 12 months and more for a a receive referencenumber. an application and waited the same amount of time to receipt between one and three months after submitting some cases organisations received acknowledgement of From the organisations it interviewed, wasfound that in NLDTF In a November 2009wereceivedletterfrom the NLB with a request to provide moredetail in our budget. We providedthe [NLB] saying it had owever in However some cases or- been 137 In the months following, we madefollow-up calls to the NLB, only to realise that the urgent granted In July 2009, our organisation submitted a proposal for project funding. Building on If the funds could not be granted by the November 2009project, as it had been R8 million of in formalisingthegrantagreement. World Cup call for proposals in 2009, but reported delays its application in respectof the NLB’s special FIFA Soccer tion. Another organisation a quick responseto received there has been along delay in itsmost recent applica ottery funding between 2002 and 2007 reportedthat time. One organisation that had National received there has been adeteriorationin the Board’s response for many consecutive years havefound that since 2007, Some organisations that have been applying to the NLB interview,20May2010. 138 interview,28May2010. 137 eptember 2009. WeSeptember 2009. 138 -

The survey revealed that 90% of applicants followed up Organisations interviewed expressed the view that the their applications with the NLB (figure 19) with varying NLB is disconnected from civil society and the whole ap- degrees of success. Approximately 50% of applicants had plication process can be alienating and daunting. One of a positive experience of follow up, with 10% receiving a the organisations noted that there was no willingness good response on making contact, and just under 40% on the part of the NLB to engage with applicants from being promised a response and receiving one. However, the point of submitting an application to the point of the almost 50% of applicants did not receive satisfactory ser- grant agreement being signed. vice. Almost 40% were promised a response but did not ‘This unwillingness and disinterest of the NLDTF to engage receive one, and in just over 10% of cases the telephone gives the Fund an air of “high-handedness”.’140 was not answered. 4.5.4. Disbursement of funds Where organisations were successful in their applica- tions, in just over 50% of cases the first disbursement of funds was received within 2–6 months (figure 20). In ap- proximately 40% of cases disbursement of funds took be- tween 7–12 months or more than a year to materialise.

Figure 19: Lottery response to applicants following up on progress with proposals

Some organisations expressed frustration with the NLB’s lack of response to their applications and the fact that they had to follow up several times with the call centre. Many organisations that tried to follow up were dissatis- fied with the response received: Figure 20: Time taken for funds to be disbursed after a successful application ‘We do try to follow up as the process becomes drawn What is clear from the data on timeframes for processing out without any news. Our application covers January to applications is the fact that in most cases it takes the NLB December 2010 yet by late May we don’t know what is over a year to process applications. This impacts nega- going on. Sometimes there is [even] no answer when we tively on the ability of organisations to plan and imple- call. And no returned calls when we leave messages. This ment work, and undermines the sustainability of CSOs. is frustrating and high maintenance processes even before we get the funds.’139

139 Interview, 19 May 2010. 140 Interview, 28 May 2010. 69 70 MEETING THEIR MANDATES? Box 3: is notthe case.Due tothe administrativesetupat the NLB,itseemsimpossibleto raise theseissueswith anybody who isin aposition to sortoutthe problem. that the funds are yet to be received, but this has made no difference. At one stage NLB records showed that the grant had been paid to the university but this grounds that the projectdocuments were not included in the applications. The university has appealed,afterhaving informed the NLBon numerousoccasions university applications submitted to the NLBhave beenrejectedon the grounds that ithas not receivedareport onthe dramabursaryproject,and on the 2005 butthe NLBstillexpectsthe university todeliverthesameoutcomesdespite factthat several yearshave elapsedandcostshave increased. Two other been involvedinthehandlingof theproposalsofar. have officers grant NLB different Four funds. any received not still has it but payment, for prepared being were documents the that informed was university the 2010, May and March in follow-ups After NLB. the to them submitted and documents the signed university the department, correct the in arrived finally the university’s bank account details. The NLB then sent a fourth set of grant agreements, but to the wrong department. When the fourth set of agreements NLB was dealing with the matter. the in who and agreement grant the of status the about uncertainty the to added which 2008 in left project the with dealing been had who officer grant The up. In 2008 the university submitted a third set of grant agreements because the NLB said it could not find the first or second set of signed grant agreements. find the signed grant agreements. A second set of grant agreements were signed and submitted in 2007. No funds were forthcoming, despite university follow were senttotheuniversity,andthesedulysignedreturned. 2005/06. In 2006 the university received confirmation from the NLB that the project had been approved. The grant agreement number and grant documents The university responded to an Arts, Cultureand Oneuniversity’sexperienceofseekingNationalLotteryfundingforstudentbursaries The resultofthe NLB’sadministrative bungle isthat the bursaryprojecthas never been implemented.The 2005/06 budgetofR426000waspreparedin In June 2007 the university a received telephone call to say that there was ‘an outstanding issue’. vide steadyfundingtosustaintheorganisation’. funding see the NLB as a key local donor that ‘could pro- been affected by a decline in international and corporate rely heavily on the National Lottery for funds or who have that Those funding. their of 90% to up for Lottery tional organisations small, under-resourced on relied theNa- organisations havesources diverseof funding whilst the well-resourced the of Most event. one-off a for funding applied for top-up funds. of people running the programmes orprojects, others costs of projects and programmes, including the salaries tions’ funding applications to were support the running interview,20May2010. 141 R500 plied totheNLB forlargesums of money, ranging from Many of the organisations that interviewed had were ap 000 to 000 In 2009 the university was requested to redo the budget, twice. R20 million. Whilst some oftheorganisa Heritage DA call for proposals in 2005 by submitting an application for bursaries dramastudents in Some applied to the NLB for 145 141 - - interviewsheldon18May2010and 27May2010. 144 interviewsheldon20May2010,25 May2010and262010. 143 interview,28May2010. 142 had to suspend their programmes, the organisation, ganisations have had to dig into their reserves to support disbursement of funds from the NLB has meant that or- mission of lost documents. The implications of delays in NLB losing documents and having torequestthe resub- The delaysin funding have sometimesbeen causedbythe interview, 19May2010. 145 bad experience (box 3). down. One university department has had an extremely bilitating, with some organisations considering shutting ganisations, the anxiety of insecure funding has been de- Lottery funds saidthat they wouldapplyagain. for applied had that organisations of 95% process, cation suming and at times frustrating and cumbersome appli- It was also asked to submit a cancelled cheque to verify In August 2007 the NLB told the university it could not 142 tes ae ot staff, lost have others However, despite the time-con 144 whilstforallthe or- 143 some have some have - 4.5.5. Reporting processes Some of the organisations interviewed felt that the re- The majority of successful organisations (86%) found the porting requirements of the NLB were reasonable or easy narrative reporting process easy or of medium difficulty to comply with. However, organisations spoke about the (figure 21). Only 12% of successful applicants found narra- lack of feedback from the NLB on their reports: tive reporting difficult or very difficult. ‘submitting the report to the [NLB’s] requirements is just one step in a complicated set of steps which remain obscure... but which affects the length of the [payment] process.’146

4.5.6. Rejection of proposals and appeals With respect to organisations that were unsuccessful in their applications, 88% sought to find out the reasons for the rejection of their proposals. In 28% of cases the Lottery claimed that necessary documentation was not submitted when in fact it had been (figure 23 overleaf). Figure 21: Grantee experiences of narrative reporting This was substantiated by interviews. Some of these organisations that had their applications rejected were told that their applications were missing audited financial Eighty percent of successful applicants found the process statements, organisational constitutions or project docu- of financial reporting easy or of medium difficulty (figure ments, even though they had submitted these. Applica- 22). Only 18% found the process difficult or very difficult. tions were thus rejected by the NLB for reasons related to the Board’s own inefficiency and poor administration. One problem raised was that when applications were physically handed in to the NLB, organisations are given an acknowledgement of receipt for the application form, but not for the supporting documents. Another problem is the fact that there is high staff turnover in the Central Applications Office, making it difficult for organisations to track the progress on their applications and suppor- ting documents.

Figure 22: Applicant experiences of financial reporting

146 Interview, 27 May 2010. 145 interview, 19 May 2010. 71 72 MEETING THEIR MANDATES? Figure 23: management. its of part were staff operational that fact the and ture a problem with the organisation’s accountability struc- plication was rejected because the NLB said that it had NLB had delayedthe payment. Oneorganisation’s ap when that grant was stilloperational only because the al funds because it had not reported on its previous grant stating that the organisation did not qualify for addition as illogical, for example rejecting an old application, or Organisations described theNLB’s reasons for rejections statements. financial audited submitted not had tions The mostcommon rejected. reason was that organisa a rangeofotherreasons forwhy their applications were given were (46%) organisations of number substantial A bers wereoutintheruralareasofKwaZulu-Natal. office of the organisation and the operational staff mem- because there were only three staff members in the main interview,20May 2010. 147 Reasons forrejection

147 This, the organisation said, was untrue - - - the OversightCommittee together.’ layed because not ‘there [were] enough appeals to bring 24). The NLB told one organisation its appeal was de- longer than a yearin more than half of the cases (figure process lengthy is, however,very with the process taking appealedtheNLB’sdecision. rejected The appeal were Fifty four percent of organisations whose applications nterview, 4June 2010 148 I Figure 24: first time( turned down again for same reasons as given were the Despite appealing the rejection, the organisation was books put in a proposal to the NLBandwasturneddown. One well-established NGO with several donors on its faction withtheoutcomeoftheirappeals. of organisations which appealed theirdissatis expressed 80% Over explanation. no with NLB the by rejected nally Durationofappealsprocess box 4 ). 148 Its appeal was fi was appeal Its - - Box 4: Rejection, appeal, rejection for the same reason149

In 2004 our organisation put in an application in response to a call for proposals. The proposal was developed in collaboration with Department of Social Development (DSD) in Mpumalanga, KwaZulu-Natal and North West. The departments identified three communities where we could do capacity building and training of rural youth organisations. We made sure that the communities in all three sites were on board and had participated in the development of the project proposal. The NLB rejected our proposal on the grounds that the core objectives named in our trust deed were not in line with the focus of the proposal, and because a signature was missing from one page in the submitted documentation. In our appeal, we explained that our board was busy updating the trust deed from 1994 to ensure that the deed reflected our core activities. While updating the trust deed, the Trust had been requested by the authorities to update its tax exemption status. The process of formally amending the trust deed had to wait for this tax exemption process to be finalised. Due to a backlog at the SARS Tax Exemption Unit, this was taking longer than expected. Our appeal included excerpts from the new trust deed which was still being processed by the Tax Exemption Unit to show that the deed was indeed being updated. One year after having lodged our appeal, the NLB rejected the appeal again on the same grounds. In 2006 we submitted another project-specific application to the NLB. The Trust had in the meantime hired a previous employee of the NLB who regularly checked on the status of the application. This way we heard through the grapevine that the 2006 proposal had been rejected due to one signature missing in one of the supporting documents in the application. There were also rumours that the proposal was rejected because the NLB was under the impression that the Trust was a profit- making entity, despite the NPO certificate having been submitted as part of the application. In 2007 our Director requested a meeting with the NLB in an attempt to move the application forward. During the meeting the Director was informed that the NLB was experiencing certain difficulties with Board members which slowed down the processing of applications. The Director has had no feedback from the NLB since that meeting.

149 interview, 24 May 2010. 73 74 MEETING THEIR MANDATES?

interview,24May2010. 150 NLB tocourt Festival Orchestratakesthe Box 5: TheJohannesburg 150 One organisationtooktheextremestepoftakingNLBtocourtgetitsgrantpaid( • • • • • • • • refused tosigntheamendedgrant agreement. payments would bedone in stages and that the payment could not be usedto cover lawyer’sfees.Theorganisation The grant agreement included conditions not included in the original grant agreement for R6million, namely that the During September 2008. this time the NLB sent a newgrant agreement to the organisation for the amount of in was date court high available earliest The date. a book to court the approached lawyer organisation’s The 2008: June guarantee thattheorganisationwouldwin. the take to NLB tocourt. The Directorhadtotakeabond out on his private propertytopay for thecase,knowing that there wasno willing was who a lawyer identified Orchestra The effect. this to agreements grant signed had and NLB the This information and rejected. put the organisation under greatstrainasithadbeenwaiting the fullgrant to receivefrom grant agreements. No reasons were given for the rejection apart from the fact that the application had been re-adjudicated grant had been rejected, despite the fact that it was initially approved and that the organisation had returned the signed the that him informed who Office, Applications Central the in Manager Letoaba, Marjorie called Director The 2008: July to clarifytheseissuesbutdidnotreceivearesponse. NLB’, despite the fact that it had not any received funding from the NLB before. The organisation sent a letter to the NLB Arts Distribution Agency would contact the organisation to obtain full audited accounts for the ‘previous grants from the the by NLB about these concerns, or any other concerns. informed formally never was organisation The documentation. application the of part as certificate registration being caused by the NLB’s belief that the organisation was not a Section 21 company, despite ithaving submitted its not had NLB The grant. the on up follow a signedprovided grant agreement and no payment had TheDirectorheardarumourthat to been received.thedelaywas months three every NLB the to letters sent organisation The 2006–2007: formal NLBfeedbackwasreceivedduringtheremainingpartof2005. No order. in was all that informed was organisation the and visit the on off signed Young & Ernest from representative organisation’s bank account details. This was a challenge as the organisation did not make use of cheque payments. The the verify to cheque cancelled a required also NLB The did. immediately it which three, to two from Young signatories financial & Ernest of representative a that it informing NLB would do a site visit. Therepresentative madea visit and the organisation was to requested increase the number of the from letter a received Orchestra The 2005: September agreement whichwassupposedtobesignedbytheNLBneverreturned. grant The requested. as NLB the to agreements grant two of set the returned and signed organisation The 2005: August R6 million. of amount full the granted had NLB the that it informing agreements grant of set a received organisation The 2005: July Within aweektheOrchestrareceivedletterwithreferencenumber. of acknowledgment an had not had he as application receipt. Hewasinformedthat the application did notnumber have areferenceyet,but he wouldbeinformedshortly. the on up follow to NLB the called Director The asprofessional 2005: February fortraining Africans South black ten orchestra musicians. identified and communities disadvantaged previously targeted the in funding Lotteries National for amount of application an submitted Orchestra Festival Johannesburg The 2004: November R6 million. The essence of the proposal was a request forfunding for a series of children’s concerts which It also heard fromone of the operators in the NLB call centre that the box 5 ). R3 million. Box 5 cont.: The Johannesburg Festival Orchestra takes the NLB to court

• 15 September 2008: An out-of-court settlement for R3 million was reached on the day of the court case. A court order was issued demanding that the NLB pay the organisation the full amount of R3 million by no later than 15 October 2008. No grant agreements were signed so the only documentation that described the terms and conditions for the R3 million was the court order. • 15 October 2008: No funds were received from the NLB despite the court order. The lawyer acting on behalf of the or- ganisation (who was also waiting for payment from the organisation which it could only pay once the funding had come through) arranged for all the NLDTF bank accounts to be frozen on the grounds that the NLB was in breach of the court order. All the Fund’s bank accounts were frozen for two days and only then was the payment made. • 2009–2010: The R3 million was spent on children’s concerts in 2009–2010 and the Orchestra provided reports (both finan- cial and technical) to the NLB, including a DVD of the concerts.

4.6 concluding comments LDTF application forms are generally agreed grant money. Organisations that have had their considered to be easy to fill in and the applications rejected were often given illogical reasons supporting documents required are standard, for the rejection, and those that lodged appeals found but applicants’ problems begin once the process to be unsatisfactory. Napplications have been submitted. There have been Organisations expressed the view that the NLB seems delays in providing receipts, reference numbers for removed from the sectors that it is funding. Organisa- submitted applications sometimes taking up to a year, tions described the experience of contacting the NLB and further delays in adjudicating applications. The entire call centre frustrating, exhausting, time-consuming and process can take up to two years. There have been a few alienating because they are seldom able to speak to the organisations whose applications have been processed same person. This lack of continuity is a serious obstacle with no delays, but these are more the exception than to resolving problems, as is the situation some report the norm. Delays in disbursing funds to organisations of staff lacking the skills and experience to assist them have been so severe in some cases that the anxiety effectively. A common experience among applicants and insecurity in these organisations have threatened is the NLB losing track of documents submitted with the existence of these organisations. In extreme cases, applications, something which has resulted in either organisations like the Johannesburg Festival Orchestra severe delays in accessing funds, or in applications have taken the NLB to court to force it to pay the being rejected.

75 76 5 MEETING THEIR MANDATES? Agency Development The National T and ruraldevelopmentwork,wascreatingemployment. The focus of itseducation and training, as wellurban Macanda 2003:4). development and urban development’. (Gardner & priority of SocialDevelopment. ety and the state. TheNDA is located in the Department search and dialogue around relations between civil soci aim of the NDA. broader the within fits work whose NGOs and CBOs to state anddonorfunding and makethese funds available addressing thecauses of poverty. Itspurpose is to access that are working towards the eradication of poverty and ‘the address for CSOs. Grantsgiven were to CSOs to assist institution the state to afunding as specifically administration ment Trust was established in that year by the De Klerk been in existence since 1990. The idea of a national developmentagency to fund CSOs has Whilst the NDA was only formally launched in 2001, the 5.1 development Background andcontext given king funds available to civil society organisations The Actsetsout the main aim of the NDAasma- National Development Agency Act108of1998. he NDA was established in 2001 in terms of the to] Its second purpose is to facilitate re backlogs education in and black Independent Develop- training, communities health, [with rural - - and thetransformationof IDT. the establishment of a newstate developmentagency government. ANC-led This idea wasusedasthe basis for on the impression significant a made society civil with ed in terms of its development agenda and partnering the However, presenceof the government, not it did have credibilityamongst CSOs. that, because the Gardner and Macanda (2003: 4) for its demise has been cratic era in its original form. One of the reasons given by Despite its success, the News Briefing,28July1995). [community-based ‘communities the power to initiate, plan andimplement to give Ministry’s budget to the his of million R70 allocated Radebe Jeff Minister Works Such was the success of the wide rangeofhousingprojects’.(Op.cit.:105). more than 20 000businesses; andcarried newsmallouta principals, set up literacy programmes; helped establish educational programmes for 140 and thousands of new classrooms and toilets; it ran irrigation ‘schemes for agricultural betterment, rural clinics, ment programmessuchas: (Johnson 2009: 107). During that time it funded develop- further R600million, and had raised a further R4billion had disbursed R2.7 billion of its initial start-up fund, had committed a it years six first its during and billion R3 The IDTwas set up with an initial government grant of and electrification; IDT had historical ties to the apartheid public IDT didnot last into the demo- IDT to disburse to CSOs so as works] IDT that in 1995, then Public it IDT and what it represent- built 000 teachers and school projects’. community (ANC centres Daily

As an interim measure between the transformation of During this transitional period – the two-year lifespan of the IDT and the establishment of a new state develop- the TNDT – government started the process of establi- ment agency, the Transitional National Development shing a national development agency, a more permanent Trust (TNDT) was set up, with a two-year life span, to give state funding institution. This process was located in the money to NGOs. The TNDT Board included representa- Office of the Deputy President, Thabo Mbeki, andan tives from IDT, Kagiso Trust, SANGOCO and NEDLAC [the Advisory Committee was established to investigate and National Economic Development and Labour Council]. It make recommendations to the Deputy President and was capitalised with R50 million from government and Cabinet on: R70.1 million from the European Union (EU). However, • The functional relationship between even before its formal registration in 1996, there were al- government and CSOs to assist in the ready rumblings of discontent in the ANC with the TNDT, implementation of the RDP; and and calls were being made for a national development • The possibility of establishing a National agency free of any association with the IDT (ANC Daily Development Agency. News Briefing, 28 July 1995). In its first phase of opera- The committee presented a report called ‘Structural Re- tion, the TNDT was already plagued with internal ten- lationships between Government and Civil Society Or- sions and conflict, ganisations’ (NDA Advisory Committee 1997) to the Of- ‘because it included representatives of organisations or fice of the Deputy President. It highlighted the fact that Ministry of Social Development constituencies that were applying for funds [which] was the two existing state funding institutions in the field – not just viewed as being fundamentally flawed but as a the IDT and the TNDT – were not well placed to disburse complete disaster’. (Gardner & Macanda 2003: 6). funds to civil society. The report referred to the difficult relationship between the IDT and CSOs due to the IDT’s As a result of these problems, the TNDT was only able association with the apartheid government, and poor re- to disburse R16.5 million of the R120 million of start-up lations between the civil society sector and the TNDT as funds.151 a result of the TNDT’s fractured state and its inability to A former Board member remembers the time of the disburse funds effectively. TNDT as follows: The NDA Advisory Committee report recommended ‘[The] Transitional National Development Trust (TNDT) that a new state funding institution be established – one was seen by civil society as a panacea for local grantmak- that ‘will not inherit the credibility problems of the ex- ing. The TNDT was trying to get money to communities but isting institutions’ (Op. cit.: 6); an institution that would it was a new organisation setting itself up in a new politi- promote the objectives of the RDP. It presented two op- cal climate. The flood of applications from CSOs, combined tions. The first was the establishment of a funding unit in with an early partnership with the EU, which was extreme- the Ministry of Finance that would fund CSOs on the re- ly bureaucratic… almost brought the TNDT to its knees.’ 152 commendations of a joint committee made up of govern- ment departments and CSOs located in, and accoun- table to, the Office of the Deputy President. The Deputy 151 summary brief of NDA Advisory Committee 1997. 152 interview with Annemarie Hendrikz, 12 October 2010. President’s Office would have full responsibility for policy 77 78 MEETING THEIR MANDATES? pact this had on these organisations. enced after1994in accessing funding and the im- severe ment. Turok (1999) speaks of the difficulties NGOs experi- 154 153 recommended that the unallocated funds of the TNDT resourceswhich included all its assets, and the NDA be established using the budget savings in the framework’ (Op. cit.: 7). independence, while stilloperating within a government the secondoptionof thegreatestdegree ‘provide[d] pointed by thepublic. Committee feltthat The Advisory ordination and funding, and have a governing body ap port directlyto Parliament, be responsible for policy co- The Committee recommended that the NDA should re play an oversight role ratherthan a co-ordination role. andwould President the Deputy of Office the in cated National Development Agency which would also be lo- mended by the Committee, was the establishment of a located. The second option, which was strongly recom- co-ordination and decisions on how funds should be al- an ‘environment in which CSOs can flourish’; can CSOs which in ‘environment an 1) were: the establishment of a mechanism for creating article written by Ben Turok, ger relations with CSOs was articulated strongly in an The intention of governmenttobuild the ANC-ledstron society to meet the development needs of foster stronger relations between government and civil commissioned projects. tory body responsible for implementing government- Central elements of the thinking behind the NDA Op. cit.:7. and thesecondExpandedPublicWorks Programme. of government’sISR DP, DSD’socialDevelopment Programme projects. Itwasgiven,amongotherprojects, theimplementation transformed intoanorganisationthat implementsgovernment The IDTiscurrently aSchedule2public entity.Ithasbeen 153 IDT be transformed into a statu It also recommended that the IDT. TheAdvisoryCommittee

an ANC memberof Parlia He lists a number of South Africa. 154 and 2) to RDP, - - - - -

approved the process of transforming the Cabinet and President Deputy the of Office the mittee, state-civil societyrelations. through the NDA is an essential part of building strong Against this background, Turok says that funding CSOs centred and people driven transformation’ (Op. cit.: 44). citizenry, both of whichthe‘corevalues ofpeople- are and transparent government and an informed and active between government and civil society are a key to open and Tactics’ document, which holds that strong relations Turok refers with approval to the ANC’s 1997 ‘Strategy fact that they are a counterweight to state bureaucracy. poor communities, values-driven work,idealism, and the strengths of NG Deputy President totheMinistryofFinance. the of Office the from TNDT) the of closure the seeing Bill once it had been approved by Parliament and over in Parliament, appointing the Board, administering the lishing the NDA (which included processing the NDA Bill ted, Cabinet moved the main responsibility for estab- cial Development Forum. While the Bill was being draf- the TNDT,IDT,Kagiso Trust andtheNational Welfare and KwaZulu-Natal, the NEDLAC Development Chamber, ganisation (SANCO), CBOnetworksin the Northern Cape of Churches the (SACC), the the Forum included SANGOCO, gather input for drafting the NDA Bill. CSOmembersof guidance’ (Gardner&Macanda2003:6). ‘political-level and toprovidesupport, intervention and ment’s interests in the process would be safeguarded rial Committee was responsible for ensuring that govern- drafting of theNDAlegislation and costing. The Ministe The Implementation Committee was responsible for the leadership of Deputy Minister Phumzile Mlambo-Ngcuka. lishing the NDA. Two committees wereset up under the Following the recommendations of the Advisory Com - A consultative StakeholderForumwas established to Os: their informal style, commitment to South African National Civics Or- South African Council IDT and estab So- - - -

The NDA Bill was finally passed on 9 November 1998, a The NDA was expected to be a source of funding to CSOs full 21 months after the Advisory Committee’s recom- and one of the key mechanisms to alleviate poverty in mendations were first made to the Office of the Deputy South Africa. However, according to Gardner and Ma- President. The NDA Board was appointed in 1999 and in canda (2003: 10), there were a number of errors. The first 2001 the NDA’s administration and functions were trans- error was not ensuring continuity and the transfer of in- ferred from the Ministry of Finance to the Ministry of stitutional memory and expertise from the TNDT to the Social Development in 2001. The NDA was launched in NDA during the transition period. The Presidential Com- 2001, three years after legislation was enacted and close mittee appointed to establish the NDA consisting of Jeff to five years after the first set of recommendations had Radebe, Phumzile Mlambo-Ngcuka, Thoko Didiza and been submitted. The TNDT had stopped disbursing funds others was in 1996 and, in that five year gap, CSOs that were relying ‘not given the opportunity to become custodians of the on government funding were in financial crisis. Despite NDA, although they knew more than any other Cabinet extending the TNDT’s mandate to 2000, CSOs suffered Minister about these issues... [they should have stayed] the impact of a fundamental shift in the practice of many with the NDA longer in order to ensure that it was infused donors from directly funding recipient organisations to with those earlier ideals and that they were tested’.157 bilateral government-to-government funding. Many of these funders believed their money would continue ma- Because CSOs had expressed their dissatisfaction with king its way to CSOs via the RDP Fund, not anticipating the TNDT, the first NDA Board appointed in 2001 tried that there would be an extended disruption to the flow to shed any association with the Trust. The resulting dis- of funds.155 tance between the two organisations meant that there was no sharing of experience between the two bodies, The funding context at the time the NDA came into being so no transfer of knowledge took place. According to Ed- was marked by a civil society sector that was in crisis: gar Pieterse (quoted in Gardner and Macanda 2003: 10), ‘When the RDP was disbanded, this caused further ‘[although] the TNDT had had a rocky start, towards the confusion in Ministries, the public and small organisations. end of its term it had really started to get a handle on With the arrival of GEAR, which gave a clear message that quality grant-making; it had been able to reach vulnerable poverty eradication was not going to be a government or marginalised groups; it had institutional memory and policy priority, it was hoped that the NDA would at least system-level expertise and a strong management team provide the possibility for government to address the issue [which were] lost in the establishment of the NDA as a of poverty alleviation in a structured and effective way, distinct entity.’ working with civil society.’156

155 interview with Annemarie Hendrikz, 12 October 2010. 157 Former Board member and NDA CEO Delani Mthembu 156 Ibid. quoted in Gardner and Macanda 2003: 10. 79 80 MEETING THEIR MANDATES? not TNDT. time and the process further disrupted the work of the the Agencyseriously. located to the from received its inception is a fraction of the funding al- and 2003.Thesmallbudget between 2000theNDAhas alleviation in and andmillion 1998 1999afurtherR300 gramme, forexample,R203million received for poverty 159 interviewwith Annemarie Hendrikz,12October 2010. 158 for poverty alleviation’. the amount that is ‘routinely given to other departments NDA (excluding a grant from the of operations, government allocated year first its In small. very was allocation budget initial than bothofitspredecessors. prove to government and CSOs that it was more capable ing from scratch. Atthe same time,theNDAwastrying to to start developing systems and processes for grantmak The lossofinstitutional memory meant that the NDAhad finalisation ‘the much anticipated establishment of the NDA, delayed by in theNDA.AformerBoardmembersaid: not automatically secure senior management positions sage to those who in worked the TNDT that they would Pieterse also noted that the time wasusedto send ames- This performance-related.’ and organisation that the opportunity wasusedtoretrench disruptions, job insecurity and perceptions within the Another key start-up problem wasthat the NDA’s Griffiths Zabala quotedbyGardner andMacanda,2003: 11. smooth appoint raised Experienced tensions of and staff the IDT, suggesting government does not take

a in required significant from all a 158 manner round. 159 the legislation, The DS Poverty Relief Pro- funding outside, There which EU). This was lessthan was was backlog 190 million R190 to the came the a not transition period at fair developed. a troubled and of staff was not -

be four-fold,namely: From these objectives, theroleofNDAcan be saidto development policy. ment policy, and to conduct publishable research on experiences’ (S3(2)(a)), to promote debate on develop- ting ‘consultation, dialogue and sharing of development relations between the state and civil society by promo- tive is that the NDA is to be the mechanism for building vice provision to poor communities. A secondary objec institutional capacity of other CSOs involvedin direct ser needs of poor communities and by strengthening the outpro- carry to jects or programmes aimed at meeting the development CSOs to funds granting as specified staff andfinancialregulations. functions of theAgency, its management, governance, its causes’. and civilsociety organisations to eradicatepovertyand ate and sustainable partnership between states that theNDAisaimedatpromoting an ‘appropri legislativemandate The preambletotheNational Development Agency Act 5.2 4. 3. 2. 1.

The mechanism to achieve the NDA’s objective is eradication programmesandprojectsofCSOs. To actasagrantmakertopovertyalleviation/ development policy. of experiences,ideasandprovide inputinto CSOs wherecanparticipateinthesharing To buildpartnershipsbetweenthestateand provision. To buildthecapacityofCSOsinvolvedinservice To producepolicyresearchondevelopment. It also goes on to set out the objectives and Government - - -

The Act also states that the NDA ‘must’ act as conduit for Because the NDA’s mandate has been too broad and it funds for development work of CSOs (S4(1)(a)), develop has not been given adequate resources to enable this policy for its objectives, build the capacity of CSOs to car- mandate, the NDA ‘could not seriously act on the man- ry out development work and create, maintain and share date without narrowing down the focus’ and it decided a database of CSOs with other government departments to narrow its mandate by looking ‘almost at household and stakeholders. The legislation also provides that the level’.161 NDA ‘may’ grant funds ‘in accordance with such criteria ‘...the 100 million [Rand] was a drop in the ocean compared and procedures as the NDA determines’ (S4(2)(a)) to to the billions spent on poverty alleviation in the country. CSOs for the purpose of implementing poverty eradica- We were aware that this amount could not alleviate or tion programmes and projects. eradicate poverty. We were therefore very selective on The gap between the NDA’s legal mandate and what who the money went to.’162 it does in practice is due in large part to the fact that the mandate is ‘huge’160 and the NDA has consistently been When the NDA narrowed its focus, it closely aligned its allocated very limited resources. In the first instance, the funding strategy with government’s poverty alleviation Act states that the NDA should fund CSOs and build the strategies. The focus fell on funding projects that create capacity of CSOs to deliver services effectively with the employment and income-generating opportunities. NDA aim of eradicating poverty and all its causes. Eradicating grants in these specific focus areas were informed by poverty requires a more transformational approach; one Cabinet Lekgotla resolutions on poverty eradication, Pro- that tackles the system that causes poverty. Hence the vincial Growth and Development Strategies (PGDSs) and transformation projects and programmes that ought to municipal Integrated Development Plans (IDPs). Special have been supported by the NDA should include rights- attention was given to poverty stricken areas which in- based work, building knowledge for transformation, ad- clude the Integrated Sustainable Rural Development Pro- vocacy and lobbying activities, and strengthening CSOs gramme and urban renewal nodes (NDA 2008: 13). so that they are able to engage with the state around the During the Mbeki era (1999–2009), there was a move eradication of poverty. Considering the service delivery to centralise planning through integration and co-ordi- backlogs experienced in poor communities, the imple- nation that was visible at local, district, provincial and mentation of large-scale interventions to stimulate eco- national level as well as inter-sectorally between govern- nomic growth as a means to alleviate poverty is the role ment departments. Some of the tools used to facilitate of government. Civil society should not be rolling out lo- integrated and co-ordinated planning included the PGDS cal economic development and providing basic services and municipal IDPs. Some ISRDP nodes and urban renew- on the scale that is required to alleviate poverty. al nodes were identified as ‘Presidential Nodes’ and many departments began directing their project expenditure into those nodes. The latest NDA strategic plan (2010– 2013) indicates that the funding strategy is informed by:

160 Interview with former NDA Board member who 161 Ibid. wished to remain anonymous, 12 October 2010. 162 interview with Dr Stephen Rule, 19 October 2010. 81 82 MEETING THEIR MANDATES? agencies, development national different other with NDA the ing requires the Agency to be independent. When compar able partnership betweengovernment and civilsociety legally to required promote an appropriate and sustain the Agency to be independent. The fact that the NDA is sectoral way strongly suggests that the intention was for the funds could be usedin a more cross-cutting inter- to be housed in the Office of the Deputy President so that in the NDA Act. implementer ofstatepolicies. bridge between the state and civil society, not just the also helps to answer.TheNDAwassupposed tobethe to alleviate poverty should be a question that civil society right areas for the NDA to focus its grantmaking in order with and input from civil society. Whether these the were ductively wasmadein the absence of any consultation pro- land the farm to beneficiaries reform land porting funding local economic development initiatives and sup poverty through stimulating local economic growth by ment agenda. The NDA’s decision to focus on addressing tives that are closely linked to government’s develop- poverty reduction programmes to mean those initia date to fund CSO engagement in poverty alleviation and is left to the NDA, the Agency has interpreted its man Although the discretion to determine funding criteria (NDA 2009b:13). sive Rural Development Programme pilot sites.’ (CDRP) Works Programme Phase (EPWP) IIand the Comprehen the and rural development through upscale involvement in makewill targeted contribution to poverty eradication tegrated Growth Development Strategiesand municipal (PGDS)In- ‘government priorities on poverty as wellProvincial Institutional independence is not explicitly enshrined DSD’s Development Gardner and Macanda (2003:23)say one of the War on However, the fact that this initiative was Poverty Plans Program, (IDPs). Specifically, the Expanded the Public NDA ------pendence shouldbeseeninthatcontext.’ with 50% civilsociety representation. Any notion of inde- the Board. Its provision onthiswasquite unique initsday, ‘The that theAgencyisindependent: society representatives) is a strong enough reason for arguing sixcivil and representatives government (five some of whom feel that the composition of the Board NDA’s independence among former Board members, free ofstateinterference. tions of how the NDA carries out its mandate’ and being this autonomy means ‘freedom from external determina- autonomy that it [had]been accorded’ and that normally unique features oftheAgency has of been the‘degree interviewwith Dr Temba Masilela, 19October2010. 165 nterview with Dr Stephen Rule, 19 October2010. 164 I interviewwith Dr Temba Masilela, 19October2010. 163 beindependent. to difficult it making sides, both of count and [try to]ensurealignment to thepriorities fore had to take the interests of both parties into ac ing role between the state and civil society. Through its Boardtheto NDA wasrequiredplay a bridg- there independence. But Iguessthat given the nature of the NDA party.back onour personal Sowedidnotholdviewsand None of us were overtly paid up members of the ruling ‘The Boardmembers were from diverse backgrounds. in thesamemeetingwasnotthateasypractice: merely by bringing together two quite disparate groups the However, ideathat independence could be achieved would there.’ There have been differing perceptions on the perceptions differing been have There NDA was, 164 not Act say still, was exclusively a fair very amount specific – there of about were government the independent 163 composition influence. It there- voices of 165 - I Whilst it was expected that government and civil soci- civil society. It has, in essence, become an operational ety representatives on the Board, despite their differing funding body running its own programmes that are in views, would come together to govern the NDA, in reality some cases in competition with those of the civil society the Board functioned as two separate camps and as such sector. The NDA ought to be playing a role to ‘increase the capacity of the government and civil society’ (Op. cit.: ‘there was no meaningful debate and this had adversely 27) to alleviate poverty rather than playing a direct role. affected the core business of the Board’ (Gardner & The first indication of this interventionist role can Macanda 2003: 14). be seen in many of the NDA’s documents including its One Board member recalls that whilst she learnt a lot 2008–2011 strategic plan in which CSOs are described as from other members, she often found it difficult to ex- stakeholders because they are ‘our primary beneficia- press her views on appropriate strategies and priorities. ries [as] they receive funds from the NDA to implement She said political appointments of CEOs also served to en- sustainable projects and build capacity in poor commu- sure that the NDA was closely aligned to government.166 nities’ (NDA 2007b: 12) rather than partners in dialogue. The NDA Act gives the Agency the power to set its The decision by the NDA to fund CBOs without engaging own funding criteria and procedures for awarding grants. with larger NGOs has been divisive within the CSO sec- Between 2006 and 2008, the NDA had only allocated just tor. The research and development mandate of the NDA, over R125 million of the R200.84 million of committed if executed strategically, could have been used to bring funds to the provinces (62% of its funds); and actually dis- on board NGOs that have the skills, expertise and knowl- bursed only R49 493 375, i.e. 26% (Gardner & Macanda edge of the sector to assist the NDA to conduct research 2003: 18). and develop common strategies: ‘In its first two years the NDA did not do anything other ‘In the research subcommittee we were considering than give out money so research, policy dialogue and ca- questions such as what is the extent of poverty in South pacity building were heavily compromised.’ (Op. cit.: 10). Africa and how it is defined and it became clear that there was no consensus of opinion, not just within the NDA, but The NDA has failed to foster stronger relationships with in the development sector broadly. So that was the basis CSOs and to facilitate the participation of CSOs in the of the research: to get some basis for the discussion. There development of the strategic plan, funding criteria and needed to be some common ground to form the basis of best practice for grantmaking. ‘Government intended discussion to deal with important questions about poverty the NDA to be a vehicle for connecting and integrating and how it manifests itself, and being able to understand the government’s poverty eradication programmes with the important facets of poverty. On the basis of the those of CSOs’ (Op cit.: 29), as per the wording of the Act, research the NDA could then have gone to civil society and but the NDA has chosen to interpret its function as be- with their participation jointly formulate[d] positions and ing ‘a premier partner’ (Ibid.), thereby setting itself up as strategies. This would have helped to broaden the agenda, a third player in the relationship between the state and perhaps even the establishment of a platform.’167

166 Interview with Annemarie Hendrikz, 12 October 2010. 167 interview with former NDA Board member who wished This point is discussed later in the report. to remain anonymous, 12 October 2010. 83 84 MEETING THEIR MANDATES? 168 bers from15to11reduceexpenses. amended Actalsothenumber reduced ofboardmem- try of Finance to the Ministry of Social Development. The Agency to be moved from the jurisdiction of the Minis NDA attendanceatconferencesandworkshops. thepublic. to Much of the research worklistedin annual reports was be accessible must findings its debate, For research to be said to contribute to the development comes of the conference, are available on the website. conference, not eventheresearchoutputs and out a PovertyDialogue conference but no details of this ‘Research and Development’ link. The NDA hosted of this research could be found on its websiteunderthe reports do nottorefer this presentation, and no reports of any annual NEDLAC because verified be not could work which it claims was presented at NEDLAC. This the development of a National Policy Dialogue frame- form its funding criteria, impact studies of its grants and in to used it says it which flows resource and profiles, study into the state of CSOs, municipal and provincial search work undertaken by the Agency has included a NDA annual say reports fortheperiod2006–2009 re an open and transparent process of considering candi appointedrepresentatives are CSO bytheMinister after closely aligned with the NDA to DS was that the workof the NDAwasmore resentatives from nine to six. The rationale for moving rep- society civil and five, to six from reduced being tives The NDA Act was amended in 2003 to allow for the This ledtothe number of government representa- Social Development, 23October2002. Presentation to thePortfolioCommittee on Social Development than Finance. 168

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that theNDAcomplieswithAct’. NDA accessible and accountable to civil society and ensure ‘there highlight awidelyexpressedconcernasfollows: in be improvedfuture.Gardnerand Macanda (2003: 13) to required providereasons or feedbackon what could cations. provision for appeals relating to the outcome of appli tatives ontheNDABoard. have beenusedasaforumforappointing represen CSO the civilsociety chamber of NE Forums for this kind of engagement already exist, e.g. NDA facilitating government-civil society engagement. are supposed to be a key partnerof the NDA with the ment and experts. This is of particular concern as CSOs tatives. This is left to the personal discretion of govern- ticipation process in place for the selection of represen allowed to nominate candidates, there isno public par- their selection of CSO representatives. While CSOs are go about should field development the in experts and and anyotherMinisterconsiderednecessary. Works,Public TradeWaterHousing, Affairs Industry, and to consult with counterparts from Education, ernment representatives. The Minister is merely required open process is in place for the appointment of the gov- partments and experts in the development field. No such by dates presentedrepresentativesof other state de- Another key flaw in the NDA Act is that it makes no makes it that is Act NDA the in flaw key Another The Actdoesnot prescribe how state departments are If an application is rejected, the Agency is not no mechanisms in the DLAC. Thechamber could [NDA] Act to make Health, the - - - 5.3 Structure and governance of the NDA The NDA’s operational structure consists of eight ‘direc- torates’ or departments (see figure 25). The NDA decen- The Board is accountable to the Minister of Social Deve- tralised its operations to facilitate closer monitoring of lopment and to Parliament and is tasked with appoint- projects it is funding by establishing provincial offices ing a management committee (Section 8(1)) comprising which fall under the Development Management depart- the chairperson and deputy chairperson of the Board, ment. These provincial offices are headed by Provincial two government representatives and two CSO repre- Managers. sentatives. The chairperson and deputy chairperson of

the Board hold the same positions on the Management Committee (Section 8(3)). 5.3.1. The Board The Board of the NDA is made up of government repre- The 2003 amendment moved the power to appoint sentatives and CSO representatives. The CSO represen- the CEO from the Board to the Minister of Social Devel- tatives are appointed by the Minister of Social Develop- opment. The CEO is allowed to participate in Manage- ment after a call for submissions has been issued to the ment Committee meetings but is not allowed to vote. public and government departments, and taking the ad- The financial statements of the NDA are audited by the vice of development experts into account. Auditor-General (Section 11). The NDA is accountable to Annemarie Hendrikz, who was a civil society repre- Parliament for its audited financial statements, the ex- sentative on the NDA Board from 2003 to 2007, was nom- tent to which it has achieved its objectives, its business inated by a CSO which interviewed her before submitting plan and performance information relating to the use of a nomination to the Minister. She was interviewed by the resources. NDA Selection Committee which included the Director- General of DSD, and appointed onto the Board in De- cember 2003. Dr Temba Masilela, a government repre- Chief OperationsChief Financial Officer Officer sentative on the Board, was also the special advisor to the Minister of Social Development at the time he was nominated. Dr Stephen Rule, a DSD staff member, served on the Board at the same time as Hendrikz and Masilela after having been nominated by his colleagues. The first Board, which was appointed in 1999 but only came into operation in 2001, had representatives from the education, research, disabled, community Marketing and CommunicationsResearch and Development Internal Audit development, child and family development, corporate investment and faith-based sectors. In some instances, the specific organisational work experience of the Board members was not made public. Nominations for Chief Executive Officer CSO representatives came from the Equal Opportunity Foundation, the Disabled People of South Africa, Figure 25: Organisational structure of the NDA 85 86 MEETING THEIR MANDATES? and fraud scandal. GodfreyMokate, previously Deputy age for the NDA, free of association with the corruption ofthe the Secretary-General ANC at the time. The new Boarda representednew im- of office the in working ment and drawn fromE sentatives were faith-based and education sectors. Government repre rural developmentand land, environment, volunteer, as Chairperson.the society represented Civil members Board. Bishop 1999 Malusi Mpumlwana was appointed of its members, Nontobeko Moletsane, had been on the and fraudscandal.Mthemburesignedin2004. During this time the NDA was caught up in a corruption by Boardmember,Delani and wasreplacedMthembu. hlane as its first CEO. After a year, Thoahlane left the NDA Ramashia). The 1999 Board appointed Thoahlane Thoa- of the NDA(RoseSeptember,aguna Mthembu), the TNDT (Eric Molobi) and the establishment members with previous associations with the private sector (e.g. and Department of the Department of Welfare, Department of Labour, of the representatives from government came from was an employee of the Ladysmith Local Council. for the Free State Office of the Premier and DuduStaffof Chief Mokoena former a was Mahanoe Pali Prof. example, CSO representativeshadlinkswith government, for Committee of Child Protection and Development. National Association for Child Minders, and the National Lifeline and Childline, the SANGOCO, The second Board was appointed in 2003. Only one Health. Board member George Chaane was Sybrand van der Spuy). The Board had Health with some representing the ducation, Gordhan and Rams IDT, the TNDT, the Social Develop- IDT (Delani Some Some -

interviewwith formerNDABoard memberwho 169 NDA Boardmembersfrom1999 to2009. DSD, became C EO. Deputy Director-General for Integrated Development in theposition in during that time. InJune 2010 Vuyelwa Nhlapo, former acted Issel Rashida Officer Operations the 2007 Board for a CE O to be appointed. NDA Chief falls fouloftheintentionsNDAAct. party orgovernment when making Board appointments Favouring people who are overtlyaligned to the ruling the currentBoard’. pronounced political dimension to the appointments of the Premiers of provinces. There appeared to be a more the preferred candidates were mostlythe nominees of ‘interviews followed the nominations anditappeared that when thethirdBoardwasbeingappointed, of the peopleon who the2003 Boardsaidthat served left the civil society sector to work for government. One tives from their government counterparts, as many had representa- society civil the distinguish to difficult came the Chairperson, Bishop Mpumlwana. But by 2007 it be- ning three membersfromthe previousBoardincluding fied audit.MrMokatelefttheNDAatendof2007. unquali first its received NDA the 2007, in term Board’s management staff member concerned. At the end of this decessor, and laid a criminal charge against the middle- corruption scandal but it was more decisivethan its pre- this Board’s watch, the NDA was embroiled in another cal Government,wasappointed CEO in June Under 2005. Director-General in the Department of Provincial and Lo It took almost three yearsafterthe appointment of In October 2007, anewBoardwasappointed, retai- wished toremain anonymous,12October2010. 169 Table a detailedlisting 6 provides of

- - Table 6: Members of the NDA Board 1999–2009

1999–2003 • Phomolo Modise (Nominated by Mr DM Lesshope) 2007–2009 • Bishop Malusi Mpumlwana (Chairperson) (Bishop of the • Prof. Pali Francis Mohanoe (Nominated by the Equal Northern Diocese of the Ethiopian Episcopal Church; Advisor Opportunity Foundation) to the Africa Programmes at the WK Kellogg Foundation) • Dudu Mokoena (Nominated by Disabled People of • Marcia Manong (Deputy Chairperson) (Director of Associa- South Africa) tion for Community and Rural Advancement (ANCRA); Board • Nontobeko Moletsane (Nominated by SANGOCO) member, Ntsika Enterprises; Board member, SANGOCO) • Mabel Rantla (Nominated by National Association for • Chief Pheni Ngove (Fifth royal leader of the Mabunda Tribe Child Minders) of the Shangaan/ Vatsonga people; Chairperson, Social • Delani Mthembu (Nominated by IDT) Development cluster of the National House of Traditional • Rose September (Nominated by National Committee Leaders; member, National Older Persons’ Forum of the on Child Protection and Development; National Human Rights Commission; member, South African National Committee on Child Abuse and Neglect) Aids Council) • Nkululeko Sowazi (Nominated by TNDT) • David Adler (Founding member of the South African Dis- • Peter Templeton (Nominated by Life Line, Childline tance Education Institute; former director of SACHED [South Western Cape) African Committee for Higher Education] Trust; first chair- • Rev. Matt Esau (Starfish Trust) person of the South African Qualifications Authority (SAQA); • Saghuna Gordhan (Department of Welfare) adviser to the Franciscan Order’s African Programme for • Eric Molobi (CEO, TNDT) Peace through Community Development) • Rams Ramashia (Legislative team for NDA Act) • MA Madzivhandila (Former CEO, South African Chamber of • Gladys Sibeko (Department of Health and Welfare, Banking; former Assistant Director, Thohoyandou Labour Mpumalanga) Centre; Director: Internal Compliance Monitoring and Secre- • Sybrand van der Spuy (Managing director of tariat, Department of Public Enterprises) Partnership Investments) • Rev. Nombuso Maphalala (Deputy Manager, KwaZulu-Natal Premier’s Office; former Executive Council Member, eThe- 2003–2007 • Bishop Malusi Mpumlwana (Chairperson) (Bishop kwini Metropolitan Municipality; former branch organiser, of the Northern Diocese of the Ethiopian Episcopal Food and Allied Workers’ Union) Church) • Prof. Tokozile Mayekiso (Executive Dean, Faculty of Arts, • Marcia Manong (Deputy Chairperson) (Director, Nelson Mandela Metropolitan University) Association for Community and Rural Advancement • Wallace Mgoqi (Former City Manager, City of Cape Town; [ANCRA]; Board member, SANGOCO) former Chief Land Claims Commissioner; national chairper- • Joan Daries (SANParks) son of the Trust for Community Outreach and Education • Nontobeko Moletsane (TCOE) for 17 years; former director of companies including • Annemarie Hendrikz (AIDS Response; formerly SCAT Old Mutual Bank, Safmarine, Safren, Syfrets and Sekunjalo and Black Sash) Investments) • Prof. Tokozile Mayekiso (Wits University) • Steve Mohlabi (Acting Director, National Department of • George Chaane (Office of the ANC Secretary-General) Agriculture) • Onica Maphai (Department of Health) • Phuti Mokobane (Managing Director, Puledi Projects; former • Dr Temba Masilele (Ministry of Social Development) chairperson, Mpumalanga Development Tribunal) • Dr Stephen Rule (Department of Social Development) • Mmoloki Pheelwane (Board member, Future Bank Corpora- • Allan Taylor (Ministry of Education) tion (North West), North West Housing Corporation, Urban Dynamics and North West Parks and Tourism)

Governance and operations in the NDA 87 88 MEETING THEIR MANDATES? had no experience of development. right choice ashe camefroman academicbackground and the not was Thoahlane, Thoahlane CEO, first the that says 2001 only 60remained’ (Ibid.).AformerNDABoardmember NGOs working in adult education in 1997, for example, by NGOs wascatastrophic. According toJohnson, ‘ofthe 280 on effect The 108). 2009: (Johnson months 18 for account million ofitsmoney had been sitting unusedin an NDAbank 171 170 of its budget. programme staff,by April2002,the NDAonly disbursed26% alone had 10 staff excluding the CEO. Despite there being 46 sistants, five of whom reported to the CEO. The CEO’s office Administrator; 10 project administrators; and 11 personal as- managers; 19 provincial project managers; a national Projects managers, three of whom reported to the CEO; five regional ported tothe CE to 79people. statement wasevermade. reported in the NDA’s annual report of 2000 but no public by the NDA for that period had been irregular. This was made commitments financial and incurred expenditure all according to not approvedthe NDA’s budget and business plan which, mechanisms areputinplace. and to ensure that strong governance and accountability of the Board to hold the NDA accountable for its operations transparency. Questions have beenraisedabout the ability and fraud, and accusations of a lack of accountability and The NDA has been plagued with allegations of corruption governanceandoperationsintheNDA 5.3.2. Board memberDelani Mthembu. Thoahlane’s resignation after a year, and replaced him with i nterview with Annemarie Hendrikz,12October 2010. 172 During the first two years of operation the NDA staff grew the In 2000, Auditor-General found that the Minister had Mail & Guardian, Mail Portfolio Committee forSocialDevelopment briefing,5June2002. 170 171 Gardnerand Macanda (2003: 12), implied that The This included five directors, two of whom re- O; three national programmemanagers; 10 19April2002. E U froze grants after approximately 172 The Board called for 50 R50 176 Ibid. interviewswithDr Temba Masilela (19October2010),Stephen DrRule 175 174 173 a ‘in itsannual reporting to government, the NDA puts together mer Boardmembernotedthat, operation. listed as NDA beneficiaries had closed and were no longer in but found, on investigation, that organisations and projects NDA the from list beneficiary the requested personally had Alliance committee member Helen Lamoela said that she lodged requestssince 2002. Development, despite the committee having repeatedly presented such a list to the Portfolio Committee on site. There is no record of the NDA having ever formally made public in the annual reports of the NDAoron its web- been ever has beneficiaries of list complete No concern. for The NDA’s lackof accounting to the public has been acause ports, the profiles of grantees had been attached. to the annual reports because, when they had seen the re attached was beneficiaries of list full the that thought them Board members,theirresponse was surprising. Three of evaluate theNDA.’ there any performance management system against which to are projects have time toengage with activities ofthe NDA andalthough Appropriate accurate and transparent account projects of allfunded. glossy remain anonymous (12October2010). (19 October2010) andtheformerBoardmemberwho wishedto When this issue wasraisedin interviewswith former strategic-plan-brifing-department-chil 2010 www.pmg.org.za/report/20100316-national-agency-nda-its-budget- Development Agency(NDA)onits Budget &StrategicPlan Portfolio Committee forSocialDevelopment: BriefingbytheNational www.pmg.org.za/minutes/25, accessed 20January2011. Portfolio Committee Briefingquestion time(2002–2010). no identified profile are 174 driven government of

objectives 176 selected by government-identified officials other projects 173 Atone meeting Democratic than , accessed20January2011. outside and budget is of unable spend, the pockets,

NDA 175 to , 16March One for- nor give Social don’t there

was an -

The NDA’s lack of transparency was also clearly shown During his tenure as CEO, Mthembu dismissed criticisms by its refusal to participate in this research project, even levelled at the NDA in relation to its poor track record in though the research was being done by four CSOs; a re- getting money to CSOs. When asked about poor perfor- quest from the very sector that is supposed to be the mance, having only disbursed 26% of the NDAs funds in Agency’s partner. 2002, Mthembu replied: Mthembu’s term of office as acting CEO of the NDA ‘We are satisfied with our performance, as we have com- was marred by allegations of corruption, fraud, failure to mitted 67% of the funds under our direct control. As per the disburse funds and allegations of arson, prompting the auditor-general’s report 67% of the funds were allocated to Minister of Social Development, Zola Skweyiya, to launch projects of which 26% was [sic] cash disbursements. The an investigation into mismanagement, fraud and corrup- NDA ... normally releases funds in two tranches. As projects tion in August 2003.177 The investigation was conducted achieve agreed milestones, further tranches are released. by Gobodo Forensic Audit Consultants and the Auditor- This is a normal, generally accepted principle of project General. Following the investigation, disciplinary charges management.’181 were brought against Mthembu for ‘his interest in pro- jects that received finance from the NDA’.178 At the same When asked about the irregularities in the NDA’s financial time, charges of misconduct were also brought against accounting reported by the Auditor-General, Mthembu the Chief Operations Officer Pule Zwane for: said: ‘irregularities relating to procedures followed in hiring ‘in terms of qualified or unqualified, we have no problem; certain staff members [and for having] cooperated with we have met all the requirements of the... Auditor-General the CEO in giving bonuses amounting to R800 000 to staff ...They look at the other issues... such as, did you comply without proper authorization.’ (Ibid.) with policies to spend or to do xyz. If you miss any of these, to an auditor you have not complied. There were Mthembu and Zwane were both suspended on full pay. In bureaucratic requirements that the Auditor-General wants. 2005, it was reported that Zwane was paid over R600 000 The NDA had not met certain of these and this was the per year for the two years that he was suspended.179 reason for the irregular spending as reported in the audit… During the investigation, there was a fire in the NDA The NDA’s failure to obtain the approval of the Minister of offices, prompting allegations of a deliberate attempt to Finance for business and budget plans, was a very technical destroy files relating to the corruption charges against thing.’182 Mthembu.180

177 www.info.gov.za/speeches/2003/03082509461007.htm 178 Mail & Guardian, 11 June 2004. 179 Mail & Guardian, 12 September 2005. 181 Mail & Guardian, 19 April 2002. 180 Portfolio Committee for Social Development briefing, 5 March 2005. 182 ‘No budget problems at the NDA’, ANC Daily Briefings, 9 April 2002. 89 90 MEETING THEIR MANDATES? interviewwith Annemarie Hendrikz,12October 2010. 185 184 socialDevelopment PortfolioCommittee, 27October2004. 183 in enhancinggoodgovernancewithintheNDA’. was announced by the Minister as ushering in ‘a new era in the wakeof the corruption, fraud and arson scandal Nontobeko Moletsane. Theappointment of anewBoard leaving only one member of the old Boardin place – lopment, Zola tions againstMthembuandZwane. NDA had spent over R1.2 million to investigate the allega afterthe investigation. The resigned his position as COO and no reasonsbeen madepublic. haveever Pule Zwane nal charges brought were ever against him or Zwane, what and beforetheBoardhaddecidedtodo.Nocrimi resigned after the forensic investigation was completed tigation and report was finalised. was report and tigation tion, fraud andarsonwouldbedealtwith when the inves- vided oversight and that the issues raised about corrup order and told that the Portfolio Committee merely pro- Mike Waters triedto raise this matter, he was calledto mittee. On one occasion when the Democratic Alliance’s was Mthembu called to account by the Portfolio Com- ruption allegations and the forensic investigation report cor- and fraud first the between time no At regularities. ir- financial the for or disbursement of lack the for count At no point during his tenure wasMthembu called to ac Stakeholder (DSD Mthintso Vukani and Officer) Financial Chief (DSD Pakade Coceko – NDA the run to staff senior absence of a functioning CEO, D SD deployed two of its appointed until dueprocess was complete. CEO had been suspended, and no new CEO could be fraud andcorruption investigation was running, the Following this scandal, Minister of Social Deve- www.info.gov.za ‘Minister inaugurates the newNDA board’,29June 2004, The newBoardcameinto being at thetime Skweyiya disbanded the entire Board . 183 However,Mthembu 185 Given the 184

- - - - al when they perceived practices to beunfair. Theoperation i nterview with Annemarie Hendrikz,12October 2010. 187 rapid inherited a backlog in disbursements. Through the envoy – ver process was quite absorbing ofeverything... We had nterview with former NDABoard member who 186 I disburse funds.’ by partment with several other departments, the Human Resources de- picked up in the Risk Assessment done by Deloitte. Along haste. The result was a series of enormous risk factors as ‘The wrong committees made unmandated decisions, in of EUfunds: tive procedures that for were requiredthe disbursement relationship with the the chaos internally was compounded by the NDA’s poor and accountability dures not measures werein place and The NDA wasin disarray at the time. […] Board for several months! This came with its own legacy envoy acting as CEO.And there had been no functioning started ‘When Ithere was noCEO–wehadaMinisterial of applications.ABoardmemberatthetimerecalls: and it had to deal with the backlog the suspended COO, it had tothelegalprocesswhich oversee also included maining member of the previous Board.Atthe same time this governance only structure resided in the single re tion about its role because the institutional memory of Management). major The newBoardrequiredorienta looming’. competencies the wished toremain anonymous,12October2010. Just disbursement [dysfunctional] sorting 186 was in 187 of through disarray the took EU and the bureaucratic administra EU NDA place the relationship and had whole as staff been end muddle became of negatively and financial Systems, proce-

by of demotivated pressure the year affected hando was to - - - - - The NDA Board that served between 2003 and 2007 had ‘would last from 8am to late at night and go on for days, to focus much of its attention on stabilising the internal unable to pass many of the applications because of small workings of the NDA, developing and institutionalising but significant omissions and/ or errors’.190 systems, processes and practices. This can be seen in She said that, even though the Board was being pushed its strategic plan for the years 2006–2011 (NDA 2005b) by the CEO to concede to approving summarised ver- where three of the four strategic goals were organisa- sions of proposals, Chairperson Bishop Mpumlwana and tional, speaking to issues of effectiveness, efficiency, the rest of the Board stood their ground because of their governance and strengthening the business principles of fiduciary responsibility. This also meant that the Board NDA. By concentrating on strengthening internal func- had to deal with issues such as CEO Godfrey Mokate’s tions, the request to fly business class which took up much of the ‘NDA Board’s role became more operational than it should Board’s time leaving it little time to deal with strategic have been... [so] it didn’t have sufficient scope to focus on issues.191 the strategic issues; nor did it have the confidence that the At the time, the appointment of the CEO and the rela- organisation would be able to operationalise the strategic tively independent Board appeared to cause tensions vision.’188 between the management and governance structures. A further problem with the NDA has been its lack of ac- Not only did the operational issues of the NDA hinder the countability and transparency. The NDA’s business plans, Board’s attempt to focus on developing the strategic vi- strategic plans, financial statements and a full list of ben- sion, but they were accused of being ‘too hands on’ by eficiaries have not been made available to the public for CEO Godfrey Mokate. However, the Board saw this role scrutiny and engagement. Instead these documents have as important because only been made available to the Minister and presented ‘in the context of the environment [it] had inherited it was to the Portfolio Committee on Social Development. The imperative that [the Board] played this “meddlesome” audited financial statements are submitted to Parliament role. [It] had no option but to play this role.’189 but the general public is not given an opportunity to see these documents. These documents, although present- Another Board member said the Board’s hands-on ap- ed to the Portfolio Committee, are not always available proach, especially when it came to adjudicating funding on the Parliamentary Monitoring Group’s website or on applications, was necessary and important because the the NDA or DSD websites. quality of proposals that were prepared by the Provincial Managers were ‘dreadful and/ or incomplete’ and often the Project Screening meetings

188 Interview with Dr Temba Masilela, 19 October 2010. 189 Interview with former NDA Board member who wished 190 Interview with Annemarie Hendrikz, 12 October 2010. to remain anonymous, 12 October 2010. 191 Ibid. 91 92 MEETING THEIR MANDATES? the stipulationsof[theEU’s]contract’. this was because the ‘[NDA] didnot spend according to money’ with weakcontrols very that could not account for the poorinstitutions that receiving grants‘very were were return of the fraud debacle hit the NDA, the and was arrested charged.clerk Atthesametimethat responsible for making appointments. The account’s checked properlyby never the these weredepartment her qualifications when applying for the position and that also found that the accounts clerk had misrepresented Itwas payments. for procedures financial with pliance nisms in the NDA weakand were therewas a lack of com eral found that accountability and transparency mecha they picked up by any Board member.TheAuditor-Gen picked up by the internal controls of the NDA nor were irregular transactions. These transactions never were personally to the NDA’s accounts clerk and involving 28 million into was transferredfourbank accounts linked It found that during the period under investigation, and corruption in the NDA for the period 2004 to 2006. General hadtobecalledin to investigate possible fraud governance and accountability in the NDA, the Auditor- Despite the Board’s attempts to implement stronger 192 193 The Star, Social Development, 2009 National Treasury Estimates ofPublicExpenditure: 192 although the National Treasury reportedthat R7.5 million on the grounds that organisations 17October 2006. : 26. EU demanded the 193

R8.7 - - - into somebody’spocket.Itisaterriblething.’ ful that these meant millions for poverty alleviation went vestigation. We didwhat we feelhad todo.Istill reallyaw regardless of their position, pending the outcome of the in- to possibility of fraud being perpetrated, we did what we had were handledpoorlybytheCEO.’ were subjected to legalanddisciplinaryprocedures which details. fictitious with accounts bank’s lack of control in allowing a person to set up bank The CEO,GodfreyMokate, blamed thefraudon the 194 ‘the quently foundguiltyandsentencedtoaprisonterm, Whilst the actual perpetrator wasand arrested subse but wasnotheldaccountableonanylevelfor thefraud’. appointed and been in the job for about a year by then, of correction of various risk factors. A new CEO had been culpable due to lack of management and lack of oversight ‘the wrong people were isolated for blame as they were all Annemarie Hendrikz,however,feltthat the NDA. in situation the fix to determined was Board ment, it haddealtwith the matterdirectly because the that, although the incident caused theBoardembarrass- This sentiment was echoed by Dr Stephen of ‘The one thing that I am very proud of during our tenure nal charges: fraud problem as rigorously as they could by laying crimi during served this time felt that they had dealt with the 197 Ibid. nterview, 12October 2010. 196 I interviewwith former NDABoard member whowishedto 195 office do. The Star, remain anonymous, 12October2010. Chief The is that 17 October 2006. person Financial with is in the Officer jail, very staff and first

members 194 197 the whiff Boardmemberswho Company that were Rule who felt we 195 suspended got Secretary of the 196 - - - It has now been revealed by the Chairperson of the NDA The NDA has been plagued with scandal since its estab- Board that former CEO Godfrey Mokate had been asked lishment. Its reputation as a progressive and indepen- by the Board to resign due to mismanagement.198 dent grantmaker that was supposed to disburse much- On appointing the Board for the period 2007 to 2010, needed grants to poor communities through CSOs has Minister of Social Development Zola Skweyiya acknowl- been tainted as previous CEOs and senior management edged the contribution made by the Board complimen- have been accused of mismanagement and on one occa- ting members on the sion, a staff member was found to have pocketed taxpay- ers’ and donors’ contributions. It has struggled to meet ‘sterling work [the Board had done] to turn the NDA the legal requirements for financial accounting set by the around in all respects, making it more focused and able to Auditor-General. Whilst a new Board has been ushered meet its mandate of serving the poorest of the poor. It is in, yet again, with the hope that its members can clean through their hard work and excellent working relation- up the image of the NDA, it will be important for Board ship with management that the NDA received a clean audit members who have associations with organisations that report for the 2006/7 financial year.’199 are recipients of NDA funds to declare their interests.202 In the words of Dr Rule: It is not clear whether the NDA has managed to ensure that there are workable checks and balances within the ‘Each Board member has to make sure that those (senior) organisation and between the staff and the Board, and staff members answerable to them are delivering the whether the lines of accountability to the Minister of goods. We did that to a large extent. But you cannot slack Social Development and the Portfolio Committee will on that. You have to be on the ball all the time. This is my work better than they have done in the past. advice to the current Board. The main role player here is of course the CEO, who has to make sure that this happens’.200 In its ten years of operation, the Agency received its first unqualified audit in 2010.201 However, in spite of the fact that the NDA does not have its own financial house in or- der, it imposes strict reporting requirements on its gran- tees and in some instances, projects and programmes have been terminated.

198 ‘NDA fired CEO, other staff warned’, www.e-tools.co.za/news- brief/2010/news0819.txt. 199 ‘Social Development Minister announces new National Development Agency Board Members’, 16 October 2007, www.info.gov.za. 202 For example, Deputy Chairperson Marcia Manong has an 200 Interview, 19 October 2010. association with ANCRA, which has been a recipient of NDA 201 At the Portfolio Committee briefing on 17 November 2010, the CEO funds. The researchers were unable to access ANCRA’s of the NDA reported that the Agency had received an unqualified annual reports to determine the years in which grants were audit for the previous four years, but with emphasis on the matter received, but the NDA is listed as a donor on the ANCRA of irregular expenditure and irregular procurement procedures. website. 93 94 MEETING THEIR MANDATES? • • tivities. Itsstrategicgoalswerelistedas: had avastnumber of objectives, sub-objectives and ac The second strategic plan for 2006–2011 (NDA 2006b), funds by2003. function, the NDA was still only able to disburse 26% of its tence was to disburse funds and, even with only that one exis- its of years few first the in do to manage did it all ‘sharpen its focus and [play] down its funding role’. Yet 10) that it wastheintention of the NDAattimeto an indication, according to GardnerandMacanda (2003: other CS tion projects and providing grants to build the capacity of grantmaker, namely, providing grants to poverty allevia- had sevengoals, of which only to two relateditsroleasa Zuma’s StateoftheNationAddress. the NDA plan with the priorities as outlined in President tegic plan was drawn up for the period 2010–2013 to align sident Jacob Zuma came into power inanewstra- 2009, was put forward for the period 2008–2011. But once Pre- ings of thePresidential Ten Year find the account into take to revised was plan strategic ment and to priorities set by government. has responded to trends inoperating the wider environ its predecessor. Each strategic plan drawn up since 2002 and sometimes there isan overlap betweenaplan and the Minister of The NDA Board presents its three-yearstrategic plan to 5.4

The first strategic plan which was drawn up in 2002 in up drawn was which plan strategic first The Sound corporategovernance, ethicsandprobity; ment in general and poverty eradication in particular; ofthe agency in tooccupy order centre stage in develop- effectiveness and efficiency the Improving Os that are engaged in This service delivery.was Strategic visionoftheNDA Social Development from time to time, eview. A strategic Review. plan In 2005, the - - - 203 the Nationpriorities’. excellence that is ‘in support of the President’s Stateof on poverty eradication and become an organisation of relation to poverty,thesupplierofcredibleinformation thought leader, the advisor on policy and regulation in future ofthe NDA is to become thepovertyeradication Portfolio Committee in March 2007 that the longer term CEO GodfreyMokate stated in a presentation to the the programmes to which it willalign its funding areas. grammes, such as the the alignment further and mentions government pro- country’ (NDA2006a:4). in relation to social and economic development forthe account the prioritiesofMinister andGovernment the NDA aligned itsprioritieswith those ofgovernment. date ofthe NDAprovideaclearerpictureofhow closely projects. However,the sub-objectivesforthe funding man namely providing grants toCSOsforpovertyalleviation mentions the corefunction and mandate ofthe NDA, operational goalsratherthanstrategicones. ter the fraud and corruption scandal, which makes them af- NDA the of functioning internal the fixing on focused In this strategic plan, three of the four ‘strategic goals’ • •

The 2008–2011strategic plan (NDA 2007b) takes This hasin resulted astrategic plan ‘that takes into Only one ofthestrategic goals in the 2006–2011plan

March 7, 2007. the StrategicandBusiness PlanningMethodologyandprocesses, G spond tocrucialneedsofcommunities;and sustainable and integrated programmesthat re tifying poverty pockets and proactively developing A comprehensive and progressive approach to iden- tract alternativefundingandretainbestskills. management principles within the agency so as to at- core business of the agency and reviewingbusiness the to resources human and financial dedicate [To] odfrey Mokate’s Presentation to the PortfolioCommitteeon 203 ISRDP, the PGDS and the IDPs as

- - The most recent strategic plan for the period 2010–2013 under its Integrated Development programme which states upfront that it also houses the Sustainable Livelihoods and Community Development sub-programmes.205 The NDA has therefore ‘has been developed within the context of the five Govern- become a key tool in the Department’s implementation ment priorities namely the creation of decent work and of its poverty alleviation strategy. Remarks by Minister of sustainable livelihoods; education; health; rural develop- Social Development Edna Molewa during a presentation ment, food security and land reform; fight against crime to the Portfolio Committee were reported as follows: and corruption’. (NDA 2009b: 3). ‘The National Development Agency (NDA), in its planning It also stipulates that it will provide grants to CSOs to session, tried to align its strategic plan with the vision of implement projects that create employment and income Government and the needs of the people. The NDA, as part opportunities and that the criteria used to select projects of the DSD, [own emphasis] aimed to address the burning for funding are ones that are aligned to government’s issue of poverty. The NDA and DSD were not working in priorities on poverty as well as the PGDS, municipal IDPs, isolation, but in collaboration with other Departments and DSD’s War on Poverty Programme, the EPWP Phase II institutions to achieve that objective.’206 and the Comprehensive Rural Development Programme. The former acting CEO of the NDA, Rashieda Issel, stated The purpose of DSD’s Community Development Pro- in her presentation of the 2010–2013 strategic plan that gramme has been ‘to create an enabling environment for its basis was the empowerment of the poor and vulnerable through the promotion and support of community development ‘government priorities, as indicated by Department of So- work, strengthening of the institutional arrangements cial Development (DSD) focus areas and priorities.’204 and dialogue with civil society’ (DSD 2009: 54) with the Monitoring the impact of NDA funds is part of this plan; NDA playing a critical role in enabling the Department a response to criticisms that have been levelled against to achieve the latter part of the programme’s purpose. the NDA from the Standing Committee on Public The recently appointed CEO of the NDA, Vuyelwa Nhla- Accounts (SCOPA) and the Portfolio Committee for po, was formerly the Deputy-Director General of DSD’s Social Development. Integrated Development programme which houses the The NDA has, since 2001, been housed in the Depart- Community Development sub-programme under which ment of Social Development and the bulk of DSD funding the NDA falls. of the NDA was reported as a budget line item. However, Tables 7 and 8 summarise key points from the NDA’s stra- for the last three years the DSD has been reporting on tegic plans from 2002 to its most recent plan for 2010-2013. the NDA as a sub-programme of the department, falling

205 DSD Strategic plan 2006-2007. In subsequent years, the NDA has been reported on under the Community Development sub-programme. 206 ‘Minister on National Development Agency Strategic Plan & Budget 2010-2013; Child Justice Act implementation readiness.’ 204 Social Development Parliamentary Committee briefing, www.pmg.org.za/report/20100316-national-agency-nda-its-budget- 16 March 2010. strategic-plan-briefing-department-chil, accessed 3 March 2011. 95 96 MEETING THEIR MANDATES? T

able 7: ects/ programmes. ments ofNDAfundedproj 7. Conductimpactassess development action. to influence policy change and ment departmentsatalllevels tal organisationsandgovern government, intergovernmen 6. Promotedialoguebetween and civilsociety. dialogue betweenthestate munity planningandpromote process initiativesandcom beneficiaries inpovertypolicy poverty policies,engagewith policies, identifystrategic 5. Provideinputintopoverty tions andmakeitpublic. poverty eradicationinstitu reliable databaseofCSOs, 4. Establishabroadand poverty anditscauses. donors thatworktoeradicate come streamswithsignificant 3. Buildrelationshipsandin providers. the poorbyusingservice organisations thatworkwith leadership developmentof 2. Capacitybuildingand and organisations. poverty eradicationprojects and partnershipsbetween making; facilitatingnetworks pockets toinformNDAgrant- trends andanti-poverty 1. Researchintopoverty NDA strategicplans2002–2013 2002–2004 207 ------cations andmediarelations. through marketing,communi 5. BuildprofileofNDA with CSOs. of NDA,andbuildrelations ing theprofileandbranding portfolio committees,improv relevant departmentsand targeted interactionwith ment departmentsthrough relationships withgovern 4. Improvedstakeholder capacity. IT [informationtechnology] tion, financialmanagement, 3. ImprovedNDAadministra information. managing anddisseminating monitoring servicedelivery, driven dialogueandadvocacy, ment policies,community community owneddevelop velopment policythrough publication aimedatde 2. Undertakeresearchand making andmonitoring. EPWP, andimprovegrant- Government partnerships, Economic Development,Local emphasis onFoodSecurity, eradication ofpovertywith that contributetowardsthe community-driven projects integrated andsustainable funding toCSOsimplement 1. Providedevelopmentgrant 2005/6–2009/10 208 Strategic Plan2005/6–2009/10 2005b). (NDA 207 208 - Social Development Parliamentary Briefing, June2002. - - - - - dialogue. institutes, buildnetworksandpromote ment institutionsandhigherlearning partnerships withresearch,develop economic impactofNDAgrants, build a CSOdatabase,measuringsocio- potential interventionsbycompiling eradication processes,challengesand and improvesunderstandingofpoverty inform programmeandpolicydecisions internal andexternalstakeholdersto data, knowledgeandinformationto 4. create jobsinthesecondeconomy. sifying’ community-driveninitiativesthat government-wide programmeof‘mas building todriveandcomplementthe munities throughinstitutionalcapacity deliver servicestoimpoverishedcom 3. StrengthenthecapacityofCOsto viable markets. ening capacityofcommunitiestoaccess participating enterprisesandstrength funds toself-helpgroups,support port fortheinitiative,providingseed initiative bymobilisingcommunitysup government’s secondeconomyASGIS Jobs forGrowthInitiativeinsupportof 2. Playapivotalroleinimplementingthe renewal programmes. targeted atISRDPnodesandurban Integrated DevelopmentPlans(DPs) ment Strategies(PGDPs)andmunicipal eradication, ProvincialGrowthDevelop opportunities withfocusonpoverty employment andincomegenerating community-driven projectsthatcreate ganisations toimplementsustainable 1. Providegrantstocivilsocietyor Provide highquality,credibleresearch 2008–2011 209 ------institutionalising thevaluesof NDA. opportunities forpeoplewithdisabilities, cedures, creatingpreferentialemployment the efficiencyofinternalsystems andpro excellence andsustainabilityby improving 5. Promoteandmaintainorganisational sources. age resourcesandfundsfromidentified become adevelopmentpartnertolever by enhancingtheprofileofNDAto opment agencyandmobiliseresources 4. PositiontheNDAasapremierdevel impact ofNDA-fundedprojects. of CSOsandmeasuretheperformance on thescopeandgeographicaldistribution collect currentandaccurateinformation of CSOsinvolvedinpovertyeradication, conducting researchintotheconstraints disseminating developmentinformation, Development Community],generatingand [SouthernAfrican sector andwithSADC alogues onpolicywithinthedevelopment ication byholdingregionalandnationaldi 3. Facilitateresearchtowardspovertyerad projects workingwithvulnerablepeople. [early childhooddevelopment]sitesand and socio-economicprofilesincludingECD ing basedongeographic,demographic ment projects,byprovidingtargetedfund ing toCSOsimplementruraldevelop eradication ofpovertybyprovidingfund 2. Grantfundstocontributetowardsthe co-operatives. poverty alleviation,vulnerablegroupsand working withECDs,ruraldevelopment, capacity ofservicedeliveryCSOswhichare effectively bybuildingtheinstitutional them tocarryoutdevelopmentwork 1. BuildthecapacityofCSOstoenable strategicPlan2010-2013 (NDA2009b). 210 209 Strategic Plan2008–2011 (NDA2007b). 2010–2013 210 ------Table 8: Macro factors identified as significant by the NDA 2002–2004207 2005/6–2009/10208 2008–2011209 2010–2013210 2002–2004211 2005/6–2009/10212 2008–2011213 2010–2013214 1. Research into poverty 1. Provide development grant 1. Provide grants to civil society or- 1. Build the capacity of CSOs to enable 1. The legacy of apartheid and its 1. Government’s Five Year Plan and its 1. President’s integrated anti-poverty 1. Government’s five priorities trends and anti-poverty funding to CSOs to implement ganisations to implement sustainable them to carry out development work impact of poverty inequality and Vision 2014: strategy to address sections of the namely: pockets to inform NDA grant- integrated and sustainable community-driven projects that create effectively by building the institutional underdevelopment especially in rural • Economic growth and development population most affected by poverty • creation of decent work and making; facilitating networks community-driven projects employment and income generating capacity of service delivery CSOs which are areas and among black people and • Sustainable livelihoods and that specified 24 priority sections sustainable livelihoods and partnerships between that contribute towards the opportunities with focus on poverty working with ECDs, rural development, black women in particular. • Comprehensive social security system of the population including women, • education 2. The Constitution’s imperative poverty eradication projects eradication of poverty with eradication, Provincial Growth Develop- poverty alleviation, vulnerable groups and • Access to services children, youth, people living in rural • health [constitutional right] to be free from and organisations. emphasis on Food Security, ment Strategies (PGDPs) and municipal co-operatives. poverty. • Combating crime and corruption areas and urban informal settlements, • rural development, food 2. Capacity building and Economic Development, Local Integrated Development Plans (IDPs) 2. Grant funds to contribute towards the 3. The five pillars of the RDP that • Ensuring constitutional rights and good disabled people or people with security and land reform leadership development of Government partnerships, targeted at ISRDP nodes and urban eradication of poverty by providing fund- shaped government’s anti-poverty governance chronic illnesses and the elderly. • the fight against crime and organisations that work with EPWP, and improve grant- renewal programmes. ing to CSOs to implement rural develop- and inequality programme. • Playing a role in the affairs of Africa and 2. President’s key proposed interven- corruption. the poor by using service making and monitoring. 2. Play a pivotal role in implementing the ment projects, by providing targeted fund- 4. Government’s GEAR macro- the world tions include EPWP, employment 2. The Millennium Development providers. 2. Undertake research and Jobs for Growth Initiative in support of ing based on geographic, demographic economic policy. • Health campaign to address HIV/AIDS, subsidies for direct job creation for Goals and South Africa’s commit- 3. Build relationships and in- publication aimed at de- government’s second economy ASGISA and socio-economic profiles including ECD 5. Regional initiatives and structures TB, diabetes and malnutrition targeted groups, enhancing employ- ment to halve poverty by 2015. come streams with significant velopment policy through initiative by mobilising community sup- [early childhood development] sites and like NEPAD [New Partnership for • Land reform. ment search capability, education 3. Government’s priorities [for donors that work to eradicate community owned develop- port for the initiative, providing seed projects working with vulnerable people. Africa’s Development], AU [African 2. Government’s priorities on poverty and training, improving services and action] on poverty, namely: Union] and SADC. poverty and its causes. ment policies, community funds to self-help groups, support to 3. Facilitate research towards poverty erad- eradication: assets among poor communities, • PGDSs 6. Strategic partnerships and 4. Establish a broad and driven dialogue and advocacy, participating enterprises and strength- ication by holding regional and national di- integrated planning are integral to • Provinces with the highest poverty instituting specific interventions in • Municipal IDPs reliable database of CSOs, monitoring service delivery, ening capacity of communities to access alogues on policy within the development development and that development pockets including Eastern Cape, Kwa- poor households, [enhancing the] • EPWP Phase II poverty eradication institu- managing and disseminating viable markets. sector and with SADC [Southern African is a process. Zulu-Natal, Limpopo and Free State effectiveness of institutions • War on Poverty programme tions and make it public. information. 3. Strengthen the capacity of CSOs to Development Community], generating and 7. A balanced approach to develop- • ISRDP, Urban Renewal Programme, supporting women and children. • Comprehensive Rural 5. Provide input into poverty 3. Improved NDA administra- deliver services to impoverished com- disseminating development information, ment that takes into account rural to IDP, EPWP 3. Cabinet Lekgotla resolutions on Development Programme. policies, identify strategic tion, financial management, munities through institutional capacity conducting research into the constraints urban migration. • Partnerships with and mobilisation of poverty eradication, government 4. President’s key proposed poverty policies, engage with IT [information technology] building to drive and complement the of CSOs involved in poverty eradication, 8. Poverty is more than a lack of communities. programme of action on poverty as interventions on ECD, rural beneficiaries in poverty policy capacity. government-wide programme of ‘mas- collect current and accurate information income. [Income is not the only mea- 3. Government’s Ten Point Plan which well as Provincial Growth Develop- development and vulnerable process initiatives and com- 4. Improved stakeholder sifying’ community-driven initiatives that on the scope and geographical distribution sure of poverty.] includes rebuilding of family, community ment Strategies (PGDSs) and munici- groups. 9. Education is key to development. munity planning and promote relationships with govern- create jobs in the second economy. of CSOs and measure the performance and and social relations, [an] integrated pov- pal Integrated Development Plans 10. The complex nature of CSOs and dialogue between the state ment departments through 4. Provide high quality, credible research impact of NDA-funded projects. the role the NDA can play in bringing erty eradication strategy, HIV/AIDS, youth (IDPs). and civil society. targeted interaction with data, knowledge and information to 4. Position the NDA as a premier devel- these together. development, co-operative governance, 4. Poverty-stricken areas, including 6. Promote dialogue between relevant departments and internal and external stakeholders to opment agency and mobilise resources 11. The need for the NDA to define training and education, [action against] ISRDP nodes and urban renewal government, intergovernmen- portfolio committees, improv- inform programme and policy decisions by enhancing the profile of the NDA to the costs and return on investment violence against women and children programmes. tal organisations and govern- ing the profile and branding and improves understanding of poverty become a development partner to lever- of dealing with poverty. and other vulnerable groups, services to 5. ASGISA [Accelerated and Shared ment departments at all levels of NDA, and build relations eradication processes, challenges and age resources and funds from identified disabled people, food security and nutri- Growth Initiative for South Africa] to influence policy change and with CSOs. potential interventions by compiling sources. tion, training, education and redeploy- and the Jobs for Growth Initiative development action. 5. Build profile of NDA a CSO database, measuring socio- 5. Promote and maintain organisational ment of new category of workers in social that plans to identify and develop 7. Conduct impact assess- through marketing, communi- economic impact of NDA grants, build excellence and sustainability by improving development. 15 000 sustainable micro and small ments of NDA funded proj- cations and media relations. partnerships with research, develop- the efficiency of internal systems and pro- enterprises across 9 provinces in ects/ programmes. ment institutions and higher learning cedures, creating preferential employment 2007. institutes, build networks and promote opportunities for people with disabilities, dialogue. institutionalising the values of the NDA.

209 Strategic Plan 2008–2011 (NDA 2007b). 211 Social Development Parliamentary Briefing, June 2002. 213 strategic Plan 2008–2011 (NDA 2007b). 210 strategic Plan 2010-2013 (NDA 2009b). 212 strategic Plan 2005/6–2009/10 (NDA 2005b). 214 strategic Plan 2010-2013 (NDA 2009b). 97 98 MEETING THEIR MANDATES? involved mulation Method. We were being pushed into becoming be spent, particularly with regard to the Programme For priorities. determined This how ourmoney was goingto were also brought into the picture for determining our the Minister. Municipalanddistrictdocuments and reports for us.That dictate was always there. It was not just via speech ‘Every year with the State of the Nation Address, the According toaformerBoardMemberoftheNDA: agenda.’ (NDA2009b:8). trying timesand alsotostayrelevant to the Government ‘review the way it does business inorder to survive in these the opportunityto developing a strategic plan is to provide the NDA with chairperson Bishop Mpumlwana says that the purpose of the latest strategic plan for the period 2010–2013, Board goals with the anti-poverty strategies of the state. has been the push from the Board to align the NDA’s An interesting aspect of the strategic goals since 2002 interviewwith former NDABoard member who wished 215 you arecreatingotherpovertypockets.’ lots of resources go into that “poverty pocket”, and then When you have a “poverty pocket” highlighted, suddenly ticular poverty pocket, in the process creating new ones. sult wasthat suddenly lotsof resources would goto a par of termined by what the President had saidinhisannual State for us?Our priorities for each year were very strongly de- the to remainanonymous, 12October2010. Nation had in specific to Address. be fleshed nodes We or out had “poverty to to

flesh see what pockets” out 215 what does and this this

means the mean re In - - - ‘the cific choicetoworkwithCBOsas to focus on household-level interventions entailed a spe- government’s priority areas for poverty alleviation and now complete. DS (NDA 2009b), the Agency’s loss of independence is and the NDA’s stated alignment with the priorities of the programmes like the alleviation and poverty reduction vision. With the end of view of its role is to assist government to fulfil its poverty not a department of government’ (Section 3). independence from government, including saying it ‘is tegy in 2002 which made specific mention of the Agency’s There has been a very marked shift in the NDA’s first stra- interviewwith Dr Temba Masilela, 19October2010. 217 216 Ibid. cause] ‘breadth civil societybecauseofthe prioritise building the relationship between the state and According Boardmember,theNDAdidnot to aformer organisations thatweredoinggoodwork. tion, and the loss of funding has had a impact severe on appear tohavebeenbackedup by researchorconsulta The decision to move away from funding NGOs does not worked wheretheneedsweregreatest.’ level wasquestionable intermsofhowmuchtheyreally have donedamage.’ for the NDA to intervene in sucha contested terrain would in the NGOmovement that needed tobeaddressed; and and NGO movement itself, andtheir ownvarious contestations to party politics, butalsowith regard to the politics of the The NDA’s decision to align its funding strategy with conflicts. extent this of was to the It was which a mandate politicised felt 217 larger ISRDP and urban renewal nodes that and there terrain, NGOs limited were were not resources systemic 216 working just

with Its current problems [and at regard that be- - For this reason the extent of NDA support to NGOs was ‘Regional managers and project staff were seen as by providing SANGOCO with some support to hold its powerful with all the resources. They had all the power in annual conferences. Annemarie Hendrikz expressed the the provinces and for rural fieldstaff in general, power can view that civil society did not make effective use of the be intoxicating and can allow for “fiefdoms” to develop. available avenues to express itself, such as SANGOCO; The grant approval practice also became competitive instead it was distracted in trying to reach consensus on based on government-identified poverty hotspots, such issues that were not important at the time.218 Another as certain areas of KZN [KwaZulu-Natal] and Mpumalanga, former Board member said: which would get more of the NDA budget regardless of the viability and/ or sustainability of a project. Hence regional ‘I agree that CBOs were a lot less experienced, but their directors were vying for their own budgets but were needs were greater and they were a lot closer to the not prepared to do the work required for preparation ground. The larger NGOs were well resourced. They tended of compelling proposals that met all the due diligence to have large offices in Braamfontein, Houghton and places requirements, prior to submitting this to the Board’s like that, and some had highly experienced people. How- Project Screening committee for consideration.’220 ever they tended to be top-down structures; whereas our requirement was that we funded initiatives originating at The NDA could have also used NGOs as intermediary grassroots level. It was our working consensus that it was grantmakers instead of clustering projects. Gardner absolutely the correct approach: to target and prioritise and Macanda (2003: 19) make mention of a study done organisations at this level.’219 in 1998–1999 into the use of intermediary grantmakers as part of the NDA’s disbursement strategy. The report However, notwithstanding the complexities of civil made three recommendations: society, the NDA did not make use of opportunities to bring experienced NGOs into its work. For example, the 1. The NDA should make use of and extend the work research and policy development mandate of the NDA of experienced grantmaker organisations with could have been fulfilled in partnership with NGOs. Also, knowledge, skills and organisational systems for the NDA could have made use of NGOs to assist in iden- grantmaking. tifying the best projects and monitoring these projects The NDA should make use of national-level – an approach that the IDT uses in implementing govern- 2. organisations that have a long history of grant- ment-funded projects. However, the NDA has opted to making and implementation of programmes but establish provincial offices with Provincial Managers and should clarify how grantmaking will be separated provincial project managers. Not only has this resulted in from implementation. a bloated institution that is costly to run, it has also re- sulted in what Annemarie Hendrikz has called ‘fiefdoms’: 3. The NDA should make use of organisations that operate at a local level that provide support and resources to local development projects to monitor NDA projects. 218 interview with Annemarie Hendrikz, 12 October 2010. 219 interview with Dr Stephen Rule, 19 October 2010. 220 Interview with Annemarie Hendrikz, 12 October 2010. 99 100

MEETING THEIR MANDATES? interviewwith Annemarie Hendrikz,12October 2010. 222 interviewwith former NDABoard member who 221 innovative development agency. and civil society that made the NDA a progressive and pendent space to facilitate dialogue between the state pendence and thefact that it was going to usethis inde- both civil society and ofgovernment. was assumedthat the NDAwouldbeindependent of gislation that provides itsmandate and its function, it divided thecivilsocietysector. has and grantmaking inefficient and ineffective in sulted This short-sightedness on the partof the NDA has re making sector.’ deepened the divide between the NDA and the NGO grant was rightly criticised – which they did not like and which NGOs. There were enormous incompetencies and the NDA own andtherefore wanted to dothingsindependently of ‘The NDA didn’twant to be seen as not managing on their jects andofferingsupporttoprojectsonitsown. decided to tackle grantmaking including sourcing pro- Despite these recommendations and concerns, the NDA of smallgrantshasbeenunderestimatedintheNDA.’ capacity walkingthem by through the process. The value ‘Using intermediaries is highlypractical and canlocal build and R100 000couldhavebeenamoresuccessfuloption: at alocaland level making grants of between R20 ries such as model wasproblematic, very and that using intermedia- own studies showed that the programme formulation NGOs as intermediarygrantmakers. cern that the Agency did not consider theoption of using One of the formerNDABoardmembers said itwasacon Whilst it is understood that the NDA is bound by le- wished toremain anonymous,12October2010. SCAT, Community Chest and others working 222 Swilling and Van Breda Some of the NDA’s It wasthis inde- 221 000 - - - gardens andsmall-scalefarming. that funding received fromthe NDAincluded community production and brick making. Food security projects making, beekeeping, goat farming, poultry, vegetable operatives, jewellery making, shoe making, furniture nity tourism, value-adding activities, support for co- medium andmicro-enterprises],agri-business, commu- nomic development focus area included focus areasinthe2010strategicplan(NDA2009b). lopment and rural developmentbeing mentioned as new nant over the last four years with early childhood deve- food security. These twofunding areas havebeendomi NDA narroweditsfocus to economic development and not forlackof realised implementation, so in 2006 the works. The objectives of the last two focus areas were local government partnerships; public and extended again as follows: economic development; food security; tion; and health.the By 2005,NDAbroadened itsfocus to reduced three: economicwere development; educa ral development; and health. be education and training; economic development; ru- In 2001,the NDA decidedits priority funding areas would disbursementand 5.5. seen asitsbiggestfailure(Ibid.). between government, civil society and the NDA’ will be Hence, its inability ‘to create a three-way partnership allocations to civil society organisations of public funds’. over controls state indirect meant effectively it because the NDAwasseeninternationally as ‘aprogressivemove (2006: 93) state that the establishment of an agency like The projects that the NDA has funded under the eco expenditure offunds In 2002, these focus areas

SMMEs [small, - - -

The NDA also has a capacity building component through running in identified areas, the NDA has been known which it aims to build the internal organisational capa- to initiate such projects.224 This approach is similar to city of CSOs so that they become more efficient in their that of the Hungarian state development agency, which service delivery activities. In 2006–2007, the NDA made also sets up non-profit organisations or projects to R25.7 million available to 20 CSOs for capacity building, provide services where there are gaps in government to be provided by universities and accredited service pro- service delivery. viders. The programme was only implemented between The clustering of organisations and projects in the PF 2007 and 2008. Most service providers chosen were lar- method was intended to be a way of ger NGOs and each received a grant of between R950 000 and R1.8 million to provide capacity building support. ‘...partnering organisations in order to be more resource The National Treasury reported that by the end of 2009, effective in monitoring a cluster as opposed to individual there were 643 beneficiaries of this programme and the projects and to take on board small CBOs who [which] on total amount spent was R25.7 million.223 their own could not access the grant nor be monitored.’225 The NDA has two methods of sourcing applications In most cases the projects or organisations are clustered for funding. The ‘request for proposals’ (RFP) method around a ‘mother organisation’ that is considered to takes the form of advertisements in the media asking have more experience and to have effective governance CSOs to submit proposals which meet a set of policy structures in place. The grant is given to the mother or- criteria. The NDA describes this process as ‘competi- ganisation which administers the grant and channels it to tive’ and aimed at ‘well-established CBOs, NGOs and co- smaller CBOs. Former Board members said that the pro- operatives in organised communities’ (NDA 2008: 13). gramme formulation method of sourcing applications The ‘programme formulation’ (PF) method is when the was based on sound methodology, but implementation NDA provincial offices conduct research into pockets of problems arose when Provincial Managers went looking poverty against the background of the relevant Provincial for opportunities and created projects when they did not Growth and Development Strategy. These offices then find what they were looking for. For example, the Balimi reach out to CBOs and NGOs working in these pockets of Intranet project in Gauteng submitted a proposal in re- poverty and ask them to develop proposals for economic sponse to a call for proposals. However, because there development or food security projects that would lead to were insufficient funds in the request for proposals bud- poverty alleviation or poverty reduction in those areas. get to meet the Balimi budget as it stood, the Provincial CBOs and NGOs may have to enter into partnerships to Manager reshaped the call using the PF method, and the implement approved projects. In instances where there organisation was able to access a R1 305 420 grant. are no organisations in operation or there are no projects

223 2009 National Treasury Estimates of Public Expenditure: 224 Interview with Annemarie Hendrikz, 12 October 2010. Social Development. 225 Ibid. 101 102 MEETING THEIR MANDATES? practice.’ out of synch with genuinely sustainable development “how torear chickens”. What the NDAwasdoing which would have required less teaching of people on developing for organic or at least free-range chicken funded battery chickens whenthe market was fast emerging market trends to indigenous knowledge; it drawbacks of agri-business, nor did it link practice or security, not informed by soundand rigorous research. Food tablished a project. However, the chosen themes were ‘The NDAchoseprojects and inoneortwo cases es- method, andsomeriskshavebeenidentified: impact of projects that are fundedthrough the PF the of a sense get to difficult is It projects. garden of the surrounding villages to begin small food projects. Beneficiaries were identified by councillors different a provided five hectares of land for small food garden adopt NDA approach. The Chief of the Nchabeleng village the saw Cooperative, project in Limpopo, the Fekakgamo Farming by one member on the steering committee. Another a steering committee. Each project isrepresented with servingastheChairperson a representative of The project is led by the Kgwana Community Centre cluster of four villages that house one project each. the NDA. TheMamakukapitsi Project in Limpopo is a consortium. Four of the projects funds receive from which grouped 13 organisations together into a Bitterfontein Advice and Development Organisation Manager facilitated the establishment of the In theWestern Cape,theNDA’s Provincial 226 Ibid. for 226 example, did not take into account the T PGDS ofeachprovince. and challenges’from the that have beenderived onthe population, unemployment, development priorities information detail that summaries profile said ‘funding to provinces was linked to provincial annual 2009 report to thePortfolio Committee, she Acting CEO poorest provinces most in need of support. When Eastern Cape, Free State and KwaZulu-Natal as the is available. disburse fundslittlehuman where resource capacity to way efficient most the being as members Board delivery of services. This has been justified by former aligned to the state’s priorities and can assist in the enables the NDA to ensure its grants are closely method ferred of disbursing funds. The PFmethod funded than The table indicates that more PF projects were method anditsprogrammeformulationmethod. through riod 2005–2009 its requests for proposals Table 9detailsamounts givenbytheNDAfor pe- 228 able 9: 2008–2009 2006–2007 2007–2008 2005–2006 In 2005–2006, the government identified the identified government the 2005–2006, In 2008/09, NationalDevelopment Agency(NDA) AnnualReport accessed 3March 2011. development-agency-annual-report-200809-presentation Year Committed anddisbursedfundsfor2005–2009 www.pmg.org.za/report/20100216-national- Rashida RFP projects, so it seemsthis is the pre- No. ofprojects funded 104 59 95 78 Issel presentedthe NDA’s 2008– 228 R85.8 million R89.9 million R110.97 million R68.7 million Committed funds R118 million R76 million R49 million R62 million 227 Disbursed

funds , No information RFP projects 39 29 33 227 Fromannualreports. No information PF projects 64 49 42 Table 10 is a provincial breakdown of funds disbursed The bulk of the NDA’s funds come from the Department since 2002, excluding 2005–2006 and 2008–2009, since of Social Development supplemented with some support no figures were available in NDA annual reports for those from the European Union. EU funding appears to have years. ended in 2008. The National Department of Social Deve- The provinces that have received the most funds lopment includes the budget for the NDA in its Budget overall were Gauteng, Eastern Cape and KwaZulu-Natal. Vote. Over R1 054 million was made available for disbursement The average cost of running the NDA, excluding to projects in the nine provinces, the bulk of which was grants for projects, is about R76 million per year. Be- in the first three years of the NDA’s establishment. How- tween 2006 and 2009 the NDA spent almost R2.8 million ever, only R658 million was actually disbursed by 2008, on Board member fees, over R28.5 million on the sala- i.e. 62% of available funds. ries and benefits of the 10 executive managers, another R46.5 million on consultants, and over R13.7 million on Table 10: Provincial breakdown of funds 2002–2004; 2006–2008229 marketing and communication (table 11). Province 2002-2003 2003-2004 2006-2007 2007-2008 Total provincial disbursements The 2009 National Treasury estimates of expenditure for Limpopo R11.18 R51.73 R14.39 R11.45 R88.75 million the NDA said: million million million million ‘Compensation of employees, one of the biggest Mpumalanga R5.01 R19.19 R8.23 R8.93 R41.36 million expenditure items, increased at an average annual rate of million million million million 7.2 per cent between 2005/06 and 2008/09, and is expected Eastern Cape R14.04 mil- R56.21 R14.08 R15.19 R99.52 million to increase by 7.1 per cent over the MTEF [Medium Term lion million million million Expenditure Framework] period. The increase of 22.6 per Northern Cape R4.7 R8.74 R6.55 R7.25 R27.24 million million million million million cent in goods and services between 2005/06 and 2006/07 Western Cape R13.08 R51.86 R9.85 R8.26 R83.05 million is due to marketing costs. The increased expenditure on million million million million marketing was due to a management decision to reposition KwaZulu-Natal R15.59 R51.11 R16.65 R13.08 R96.43 million the National Development Agency brand.’ million million million million North West R5.5 R20 R9.66 R12.30 R47.46 million million million million million Free State R5.46 R22.23 R10.52 R7.91 R46.12 million million million million million Gauteng R10.71 R99.43 R12.81 R5.88 R128.83 million million million million million Total disbursed R85.27 R380.5 R102.74 R90.25 R658.76 million funds million million million million Total provincial R310 R544 R110.96 R89.88 R1 054 million budgets million million million million

229 Information from annual reports and reports presented to the Portfolio Committee for Social Development. 103 104

MEETING THEIR MANDATES? T able 11:BreakdownofNDAcosts2006–2009 2009 2008 2007 2006 (incl. auditcommittee) NDA Boardcosts R2 769748 R1 269137 R499 552 R624 387 R376 672 interviewwith Annemarie Hendrikz,12October 2010. 231 230 that fundingwasauthenticallydevelopmental. on existing research and analysis capacity and ensuring built which partnerships beneficial mutually and fective most likely to draw in bigger CSOs thereby optimising ef- relevance, it could also have been used as the element research budget. Not only tosustained is researchkey had shifted to cover marketing costs – morethan the budget the of one-third about NDA, the at year final her ble and effective delivery on the NDA’s mandate. In 2007, tegy and feels that the best marketing tool would be visi- from other sources. Hendrikz disagrees with this stra- rebranding the organisation will allow it to raise funds visible in its current strategic plan, is that marketing and lopment projects. The thinking in the NDA, which is still promoting the NDA rather than being allocated to deve- the NDAwaswronglytowardsmarketing skewed and Annemarie year. By contrast, the NDA has been unable to disburse projects and aboutcommunity 3 000 initiatives every the had contracted the given DS thatrevealed between 1997 and 2004, DS had been An assessment study of the NPO Act conducted by NDA annualreports 2006–2009. IDT, DS has funded poverty alleviation over 100 000 management costs R600 million for poverty alleviation projects and R28 540751 R5 004390 R8 349054 R5 863364 R9 323943 Executive 230 Hendrikz holds the view that the budget of

IDT to disburse these funds. Through R13 614298 R11 810553 Consultant R12 381831 R46 591113 R8 784431 fees communications Marketing and R2 593904 R13 795192 R4 776180 R2 193856 R4 231252 231

232 heid governmentwhentheIDT wasestablished.’ ment, apartheid and about civil society participation in develop ‘if government was seriousabout reversing the legacy of follows: IDT. Gardnerand Macanda (2003: 9)quote made available for development projects through the to the NDA the amount that the apartheid government government hasbeen neverwilling to make available threatening the legitimacy of theNDAisfact that canda (2003: 9)point out that one of the critical factors ber of projects it funds on the decline. ernment has been declining or stagnating with the num the years,amount Over granted to the NDAby gov- administered bytheNLB. source funds for the NDA from National Lottery funds ister of to source funds fromIn elsewhere. March 2010 the Min NDA the force to pressure financial using be could it or date and wants to start winding the organisation down, man its fulfilled not has NDA the that government from the NDA’s budget as either being an acknowledgement former Board ever, membersof the NDA see this cut in reason given for this budget cut was the recession. the NDA’s budgetmillionmillion. from R140to86The the 16 March 2010, it was noted that government had cut R388 milliontojust78civilsocietyorganisations. million R89.9 in grant funding out of a total budget of Be- provinces. tween 2007 and 2009, the NDA was only able to disburse the to available made funds the of 56% the funds given to it from government, disbursing only 16 March2010. NDA briefingto PortfolioCommittee forSocial Development, In the presentation to the Portfolio Committee on it Social Development said that DS was in talks to should at least match 232 the figure given Gardner and Ma OCO as SANGOCO by the apart How-

------Government has not given the NDA even half of what the IDT received, and its own departmental budgets for poverty alleviation projects exceed the total budget given to the Agency. It therefore seems government does not take the role of the NDA very seriously, and has lost confidence in an institution unable to disburse even the little money it does receive.

5.6. Civil society’s experience of the NDA This section of the report is a documentation of civil so- ciety’s experience with the NDA based on the survey, in- depth interviews and focus groups. 5.6.1. Description of NDA applicants Of the 226 organisations covered in the survey, 84 or- ganisations (37% of total sample) applied to the NDA for G auteng Limpopo Mpumalanga North West Free S tate KwaZulu-Natal E astern Cape Cape Western Northern Cape funding. Almost half of these applications came from the Western Cape (23%) and Gauteng (21%). Limpopo, KwaZu- Figure 26: Percentage distribution of applicants to the NDA by province lu-Natal and the Eastern Cape account for a further 43% of applicants (figure 26). Ninety five percent of applicants in the survey sample came from organisations in five sectors: education and training; welfare and charity; community services and local economic development research and advocacy, with the biggest share of applicants coming from human rights, advice, and support organisations (33%) (figure 27).

Figure 27: Percentage distribution of applicants by sector

105 106

MEETING THEIR MANDATES? Figure 29: Figure 28:OutcomeofapplicationstotheNDA Figure 30: Areas of operation forapplicants Percentage distributionofapplicantsbysector

Gauteng

Limpopo

Mpumalanga

North West

Free State

KwaZulu-Natal

Eastern Cape

Western Cape

Northern Cape have been successful in some of their applications work that 78% and applications their of all in successful been 31 ment (figure charity; community services; and local economic develop- education and training and capacity building; welfare and support; and advice rights, human – categories five into cessful in all or someof their applications to the NDAfall tional scaleand 19%operating atprovincial scale. na- at operating 26% to compared (55%) scale local a on applications, the majorityareorganisations that operate organisations that have not been successfulin any oftheir 30 ). operated nationally (figure pared with 22% which operated provincially, and 17% which com - level, district local/ a at operated 61% applications, North West andGautengthefiguredroppedto6%. being successful. The figure for KwaZulu-Natal NDA was 17%, while in the to applications all of 20% over with out vinces. Western Cape, all of their applications are located in six of the nine pro- ful (figure 29).Organisations that have beensuccessful in cessful, and 5% had applied three times and been success suc been and twice applied had 5% successful, been and once NDA the to applied only had 89% applications, their plications hadbeensuccessfulornot. and had not yet been informed as to whether their ap ganisations noted that they had only recently applied, all of their applications to the NDA. One percent of or- Fifty-four per cent of organisations were unsuccessful in ). 28 successful were insomeoftheir applications (figure 21% further a and applications, their of all in successful were 21% NDA, the to applied that respondents the Of 5.6.2. Almost all of the organisations that have been suc Of the organisations that weresuccessfulin alloftheir Of those organisations that successful were in all of the applicationprocess CSOs’ experiencewith ). Fiftypercentoforganisations that have Eastern Cape and Limpopo stand owever, if one looks at However, if one looks at

- - - - in these areas of endeavour. The NDA has not supported organisations in the heritage, arts, and culture sector, or that do work in relation to sport, or that provide public interest legal services. This is in keeping with the fund- ing focus on poverty eradication through local economic development and food security. Forty-four percent of applicants found the process easy or of medium difficulty (figure 32). A further 43% found the process difficult or very difficult. If one disaggregates this data, however, some varia- tion does emerge (figure 33). A higher percentage of or- Figure 31: Areas of work of successful applicants ganisations that were successful in all or some of their applications found the process easy or of medium diffi- culty (50%) than organisations that were unsuccessful in all of their applications (40%). More significantly, 24% of organisations that were unsuccessful in all of their appli- cations found the process very difficult or incomprehen- sible compared to 11% for organisations that were suc- cessful in all and 6% of organisations that were successful in some. These statistics were confirmed by the in-depth inter- views, in which CSOs expressed a variety of views on the application process and forms. Respondents reported a variety of methods for accessing NDA application forms. Figure 32: Opinions on application process Most of the organisations interviewed accessed the NDA application forms from the website whilst others in Kwa- Zulu-Natal, Mpumalanga and Eastern Cape were invited to workshops held in their provinces. In Gauteng, the NDA has begun hosting discussion forums although these forums are not held specifically to assist organisations to prepare proposals. One of the organisational stakehold- ers interviewed saw these workshops as a ‘welcome ini- tiative from the NDA to engage with civil society’.233 In Mpumalanga, one organisation reported that the NDA’s provincial office arranged a community meeting to

233 Interview held on 24 May 2010. Figure 33: Experience of application process disaggregated by success of applicants 107 108

MEETING THEIR MANDATES? sit-down lunch, handing out of pens and T-shirts’ a coffee, and tea snacks, with event ‘lavish a as scribed [we] gagement were invited to the were made available. were presentedand application forms and guidelines funding for areas focus its where Ayliff Mount and tata indicated that the NDAhadheldtwoworkshops in Um to fund’. information on what kinds of projects they are seeking ring for example an introduction to the NDA and general not being very useful as it was ‘extremely general, cove- the information provided at the event was described as [our] ments and provide a plan in log-frame format. lines, substantiate their proposals with supporting docu guide NDA the using form application an in fill to have Through the call forproposals method, organisations ‘We consistencies. in in organisational resulted staff of turnover high the cial areas of operation, some organisations found that Along with the decentralisation of the NDA into provin to organisations. als andmadeapplication forms and guidelines available inform the community about the NDA’s call for propos nterview heldon 1 June2010. 238 I interviewheldon 19 May2010. 237 nterview heldon 18 May2010. 236 I nterviews heldon25May2010and 27May 2010. 235 I nterview heldon1June2010. 234 I over thethreeyearperiodtoeight.’ officials total engaged number engaged application. and 237 plagued in with of with 2007 NDA 234 In the by In the two 2006 with Elangeni officials 235 a Gauteng huge

In KwaZulu-Natal, organisations different [we] another Eastern Cape, organisations staff which Hotel. The event was de- engaged office officials turn-over. 238 three. [we] and... with ... This with engaged found During three brings regard Some of the 236 other 2005, with but the en to ------physically.’ is an added deterrent that you need to hand in the proposal such as working with the PDF bureaucratic requirements of the application process, these However, organisations found the technical and and threedaystocomplete the NDAapplication process. fort, sometimes taking the organisation between one requirements asreasonable and requiring medium ef- the more well-resourcedorganisations described these ments. isations. These maystruggle with the application require ‘[The organisations: under-resourced for difficult prove might log-frame a of However, one organisation did note that the requirement time-consuming. physically handing in hard copies of proposals to be more and statements financial audited submitting form, tion nterview heldon 26 May2010. 242 I interviewheldon 1 June2010 241 nterview heldon 19 May2010. 240 I 239 for Human ed and time-consuming than donors like the Foundation the application process for the NDA was more complicat plete the application form. it had taken thembetween one and to three weekscom were the smaller,under-resourced CBOs. They reported Organisations that found the application process difficult fears complicated. It almost deters one from applying asone ‘very confusing and the language used was unnecessarily found theapplicationform frame charts.’ Adobe Acrobat PortableDocument Format. not NDA] For being 242 example, Rights. wants 240 able 241 to to One of the smallerCBOsinterviewed CBOs work fulfil would struggle the Some organisations felt that with

239 reporting format of the applica under-resourced to requirements. complete organ log- It - - - - - Emphasising this difficulty, another organisation found Another organisation in the Eastern Cape was ap- the need for ‘comprehensive information including a log- proached by the NDA to be the lead partner in a joint frame table... very confusing and frustrating... to com- proposal with other organisations. However, the NDA se- plete’. 243 They also found, through their networks, that lected the organisations that would be part of the part- other organisations also struggled to fill in the log-frame nership and this proved to be difficult and controversial. table and were unsuccessful in their applications. Whilst ‘After our initial expression of interest we were visited by none of the organisations used consultants to assist the NDA and asked to combine our application with other them in filling in the application forms, one of the organ- organisations, with us as the leading partner. We received isations did ask one of its donor partners to assist in filling direct assistance (and the necessary forms) to do this joint in the log-frame.244 application. A project officer from the NDA worked closely One organisation interviewed had a positive experience with us and guided and assisted us in completing the ap- of the NDA’s programme formulation method, seeing plication, which involved a complicated combination of this approach as developmental and affirming of the inputs from five partners of which we were the lead organ- good work being done by NGOs: isation. It was by decision of the NDA that a joint proposal be submitted and so the terms were complex and the pro- ‘[We] submitted a proposal to the NDA in 2006 which was cess was quite difficult. We had a joint workshop facilitated granted, and the project was subsequently implemented by the project officer and did a first draft, after which [we] very satisfactorily. The NDA then approached [us] with had to spend a weekend completing the proposal, with te- two smaller projects which the NDA wanted [us] to imple- lephonic assistance from the project officer (who was ment based on the experiences with the 2006 project. It based in East London). It was a difficult application pro- makes sense that the NDA builds on lessons learnt and cess which involved some EU requirements also. We had good experiences with partners if they are serious about no problem with the approach in principle. However in development. The two smaller follow-up projects are also practice the joint project was complicated to manage. Our recognition by the NDA of the good work done by [us] and role became controversial as there was no provision for [we] therefore appreciate that the NDA contacted [us] the running costs for the other partners. The proposal did with the view to starting new projects. It is appreciated clearly spell out the different responsibilities and roles, but that the NDA is proactive in seeking out project opportuni- not the issue of running costs of the other partners. [We] ties. When you consider the serious consequences of public had provided for an administration charge and was [were] money not being used effectively, it makes sense that the later accused of taking the lion’s share of the funds.’246 NDA should identify good NPO partners who are capable of delivering an excellent service.’245 Another organisation was approached by the NDA to submit a proposal outside the call for proposals, which it did, only to be informed by the NDA that it did not have funds available for distribution.247

243 Interview held on 25 May 2010. 244 Interview held on 24 May 2010. 246 Interview held on 27 May 2010. 245 Interview held on 24 May 2010. 247 Interview held on 25 May 2010. 109 110 MEETING THEIR MANDATES? Figure 34: Time togetreferencenumber amongst organisations. municate with applicants in writing is a cause for concern their applications. The fact that the NDA does not com still not able to get any information about the status of office to the next and fromone person to the next and were one from referred been had they that reported numbers but found this to be a frustrating process. They they had followed up with the NDA about their reference lation process. The organisations reported interviewed nisations that had participated in the programmeformu ceive a reference number from the NDA, including orga- in their applications. But some organisations did not re plications from the NDA when they physically handed They acknowledgmentreceived of receipt of their ap and six months before receiving number. a reference tions that had applied to the NDA waited between three From the in-depththat interviews,itemergedorganisa reference numberatall( no received organisations of 14% that fact the is concern seven and 12 months or longer than a year. Of greater between wait to had applicants of 27% months, 6 within number reference a received applicants of 47% Although It takesthe NDA too long to turn around applications. 5.6.3. Screening andprocessingofapplications figure 34 ). - - - - - number. sonal contact,verbalcommunicationande-mails.’ respondence during these processes. All depends on a per application? Furthermore there isvirtually no formal cor of acknowledgement of receipt. So how do they trace the after acknowledgement), instead of at the opening stage number at the time of approval/ rejection (ten months uation would be even worse. They only issueda reference not proactive and does not follow up continuously, the sit- mission of required reports. If the funded organisation is revert after submission ofapplication, and later after sub- approximately ‘From an awarenessoftheimpactthisonbudget. moving the area of operation to another place, without Other changes that the NDAmadetoproposals involved controversial implications for thepartnerorganisations. partner with others inacomplicated process that had proposals. For example, one organisation was askedto had come back to them with suggested changes to their Some oftheorganisations said theNDA interviewed 249 248 ‘[The NDA’s biggest concern.’ need to revisit the proposed budget. seemed This tobethe budget on other more easily accessible sitessothere was a get of engagement around the budget, and especiallythe bud- of the content of the proposal made, there was quite a bit provinces. While there was no real engagement in terms tions would implement programme components in other site as part of a bigger programme where other organisa ended up being allocated the Free State province as a pilot presentation to a selection committee. The organisation Interviewheldon 28 May2010. Interviewheldon 20 May2010. for NDA] the travel [We time take[s] were] to three [we]

the far at Free submitted to too the 249 four State. long same months to [We] [our] time respond had called to application get to prepared in queries a to reference 248 make it [our] or took to a - - - Another organisation’s first application to the NDA in Following the receipt of a reference number, 43% of ap- 2006 was also changed by the NDA with additional ex- plicants received a decision on their applications within penses that the organisation had to fund itself. six months, and 24% between seven and 12 months (figure 35). Eight percent of applicants had to wait over ‘The proposal which [we] submitted to the NDA in 2006 a year for a decision, and 10% never received notification was in response to a call for proposals for training civil soci- of any final decision. ety organisations in the North West Province. [The organ- isation] based its proposal on organisations located within a few hours of Johannesburg and made the proposal on these assumptions. During the finalisation of the project contract, the NDA requested instead that [we] provide training to organisations which were more than twice the distance away than the originally selected sites, but the travel and expense budget was not increased accordingly. Also, due to the longer distances, [we] had to place some- body in the community permanently which was also not budgeted for. In the end [we] ended up covering the bud- get shortfall of R28 000 from its [our] own resources.’ 250 Figure 35: Time taken for decision to fund

These figures were confirmed in the in-depth interviews – organisations had waited between six and ten months to hear whether they had been successful or not. In some cases organisations had waited over a year for news. One of the organisations interviewed had received no com- munication from the NDA during the application process and after lengthy delays assumed that its application had been rejected.251 The organisation whose case is de- scribed in box 6 had been waiting 17 months at the time of the interview without having received any response from the NDA.252

251 interview held on 26 May 2010. 250 Interview held on 24 May 2010. 252 interview held on 24 May 2010. 111 112 MEETING THEIR MANDATES? Box 6: proposals has been withdrawn by the NDA but we have not had any formal notification. for call the whether wondering were We 2006. in NDA the to application first our than whether the application is successful or not. The response time has been much slower the receiptofapplication ledged but stillwaiting we are for aformal responseasto call for proposals. This proposal has a total budget of have toapplyfortheseprojects. running. still is other not the did and We 2009, in finalised was one which of projects ler project ended in November 2008,with the total project budget having been ting funding from theNDAtosustain the momentum Our involvementin created. the nent in the entire programme. Local organisations successful we trainedwere in get- a good received veryevaluation and was highlighted as the most successful compo we startedwith the training in January 2007.Bythe end of the programme, the project posal, noadjustmentwasmadetocompensatefortheincreasedexpenses. of sites meant we would incur much higher expenses than we budgeted for in our pro- the NDA which had itspilot own sites.Despite preferred the fact that the NDA’s choice of request on changed then were which sites, specific proposing together proposal a Weselected to werebeone of 22 NGOs taking part in the overallprogramme.We put verty alleviation and local economic development over a two year period in North West. po- do to us wanted NDA the specifically More sites. target selected the of one in work In 2006 the NDA put out a call for proposals and approached us to submit a proposal to One organisation’sexperienceofapplyingtotheNDAforfunds In wemadea February 2009second project application to the NDA in response to a Following the successful implementation of this project, the NDA gave us two smal- The first tranche of the payment from the NDA came through in December 2006 and funds didnot arrive atall. arrive, orwhat would happen to the organisation if the wondered whether it would still be open when the funds and insecurity financial of period a through went isation organ small One member. staff amongst insecurity job uncertainty around NDA funding had led to high levels of the that reported organisations Some staff. its of some ing shortfalls. One of the smaller CBOshad to retrench and some have hadfunds to use reserve coverfund resources financial their on effects negative had has It resources. financial and human projects, programmes, an impact on the ability of organisations to plan their The lengthy delays in processing applications have had R2 million. The NDA has acknow- R1.7 million. - - - in future. rejected, it felt it had no way of improving its applications good received responses as to why the applications were was unsuccessful in all itsapplications. Because it had not cations. Another had applied to the NDA three times but grant because the Agency had too received many appli it was doing good work, the NDA could not provide a response wasnotlogicalorthatitmadenosense. NDA’s the that reported 87% staggering A feedback. tive 9% of cases did organisations receive sound and construc only in However, rejected. being applications their followed up with the NDA to ascertain the reasons for organisations these of 60% Almost provided. were sons rea- no many cases In cases. of only 33% ting proposalsin unsuccessful,were reasons theNDAprovidedforrejec- acceptable. Among organisations whose applications be un- to offered were they reasons the found Others felt thereasonsreasonable given wereandlogical. Some organisations whose applications were rejected 253 their chancesofreceivingfundinginfutureapplications. constructive feedback on how organisations can improve appeals process could be a good channel for obtaining table for how it disbursesfunds. They also felt that an ses public funds and shouldbeheldaccoun- therefore should have such a processbecause the Agency disbur- jected applications. Organisations feltthat interviewed it One organisationwas toldthat interviewed although The NDA does not have an appeals process for re and itneverheard backfromtheNDAonitsthirdapplication. Thisorganisation reported thatNDA lostitssecond application 253

- - -

5.6.4. Disbursement of funds by the NDA Where organisations were successful in their applications to the NDA, 71% received their first disbursement of funds within six months of the decision having been made (figure 36). Sixteen percent of organisations received their first moneys within seven to 12 months, and 10% waited for 12 months or longer.

Figure 37: Duration of NDA grant

Two of the organisations interviewed had made recom- mendations to the NDA that their project be funded over three years but the NDA was adamant that the project could be implemented in two (see box 8).256 However, due to the long delays in paying out the tranches of the

Figure 36: Time taken for first disbursement of funds funding, the project ran over three years anyway. Organ- isations that were receiving multi-year funding from the The in-depth interviews indicate varying experiences NDA seemed to experience delays with their follow up with the NDA in terms of disbursement of funds. Some tranche payment that were linked to the reporting pro- felt that the NDA was efficient in disbursing funds with cedures of the NDA,257 although one organisation which some receiving their first tranche of funding within six had a multi-year grant did not experience any delays in weeks of having signed the contract with the NDA.254 tranche payments.258 However, other organisations interviewed experienced The survey found that 36% of applicants had the NDA long turnover times for payment of their grants. Two of as their only source of funding, although the Agency pre- the organisations interviewed were selected by the NDA fers providing support where it is not the only funder. In to be part of the same capacity building programme in cases where the NDA was being asked to supplement 2006 along with 22 other NGOs. Both felt that one of the other sources of funding, 50% of applications were suc- problems with this NDA programme was that the group cessful in all cases and 67% of applications in some cases was too big.255 (figure 38). Where the NDA was the sole source of fund- The bulk of grants awarded (56%) are for a period ing, only 44% of applications were successful in all cases of one year, and a further 25% for a period of two years and 28% in some cases. (figure 37). Only 5% of grants awarded are for three years or more. 256 Interviews held on 24 May 2010 and 1 June 2010. 254 Interview held on 20 May 2010. 257 Interview held on 20 May 2010. 255 Interview held on 24 May 2010. 258 Interview held on 28 May 2010. 113 114 MEETING THEIR MANDATES? Figure 39: Figure 38: and solelyNDA-fundedprojects Grantee opinionon narrativereporting Comparison ofNDAsupportforco-fundedprojects difficult orverydifficult. than a quarter oforganisations felt that the process was easy or required a medium level of effort (figure 39 ). Less was process reporting narrative the that felt 60% almost In termsofreporting to theNDAbysuccessful applicants, reportingrequirements, 5.6.5. ing aspecificproject. of funding and some had approached the NDA for fund that funding received from the NDA had sources diverse participated in the in-depth interviews. Theorganisations Similar sentimentsbyorganisations expressed were that nterviews heldon 24May,28May and 1June2010. 259 I monitoring andsupport 259

- interviewheldon 20 May2010. 261 260 Interview heldon 24 May2010. Figure 40: payments. difficulty with reporting, the result of which was delays in knew oforganisations some under-resourced which had problems with the reporting requirements of the NDA, it pointed viewed out that although it did not have any one and useful.However,of the organisations inter- and the guidelines provided by the NDA were adequate reasonable were NDA the of requirements financial and ticipated in the interviews. Theyfeltthat the narrative supported These viewswerebyorganisations which par- (figure 40). difficult or extremely difficult process the found which 25% to compared financial difficulty medium of found or easy reporting organisations of percent Fifty-six ing. A similar finding emerged with regard to financial report- project partners( the of security financial the on impacts associated with inpayment delays caused which officer project a from nisation had interviewed abad experienceof support nisations of NDAsupport have beenmixed.Oneorga- to the organisations it funds. The experiences of orga- The NDA is to required monitor and provide support Grantee opiniononfinancialreporting 260

box 7 ). 261

Box 7: One organisation’s experience of the NDA’s monitoring and support

We submitted our report on time at the end of August 2008. The project officer only visited us in October, when payment was due. Furthermore he took until 6 December to send his report and recommendations to the head office in Johannesburg. This was in spite of requests and pressure from our side. Payment of the money Another organisation had a positive experience: due was only made on 15 January 2009 (apparently because the managers were on holiday). This caused ‘The NDA was active throughout the project implementa- the project partners to suffer as they had no funds for tion in Free State. The NDA for instance asked us to link up 2½ months, and some of the project partners were not with local LED [local economic development] people in the even able to pay staff salaries. The third tranche payment communities and this idea was good and welcomed by the is already due but again the process has been delayed. organisation, even though the relevant LED people were We submitted our report as per agreement at the end of February 2010. The project officer visited us in April not really geared to participate in the project. The NDA also and said the report had not yet gone off to NDA head made proposals as to which CBOs the project should link to office in Johannesburg. When we asked for explanations, and provide training and support to. The NDA also came the reason given was ‘overwork’. The money is needed to physically inspect the project, which was appreciated by June at the latest otherwise there will be problems by the organisation and contributed to good collaboration once again. We found it very difficult to set dates for 262 meetings with the project officer. The first visit was good between us and the NDA on this project. and he was happy with what we had done. We asked him An organisation in North West also had a good experi- about his expectations for the next visit and planned accordingly. However during his second visit he raised a ence of support from an NDA project officer who was number of problems which are hard to grasp as we had actively involved in the implementation of the project, complied with his stated expectations. It is not clear what providing useful monitoring and oversight, and ‘showing the reasons for his negative feedback are. By contrast, a real interest in the local community and the sustainabi- we have had tremendous feedback from the NDA Board lity of the project component’.263 itself. We were invited to make presentations to the CEO and the Board of the NDA in Johannesburg which we did in September 2009. The response was warm and positive and there were suggestions of a follow up. In the meantime we were experiencing the abovementioned delays in being paid our second tranche.

262 Interview held on 28 May 2010. 263 Interview held on 24 May 2010. 115 116 MEETING THEIR MANDATES? Box 8: NDA, despitehavingalong-termrelationshipthatgoesbackto2000. Box 8 our grant agreement. TheNDAdemandedthe report berewritten despite thisissuehavingbeenraised withtheNDA. travel was insufficient but no budgetary adjustment was ever made, extended project implementation period meant that the budget for change in theapproach which now involved ANCcouncillors and the payment was only madein August –almost 2008 ayearlate.The activities could only start in 2008. Due to this delay the second negative impact on project timeframe, meaning that the core This areas. affected the had not been part of the implementation plan and had a severely in councillors ward ANC predominantly preparations on hold until meetings had been set up with communities, thethat NDAsuddenlyrequestedweput our instalment inthesameamountduelateryear. second the with 2007 July in paid was 000 R265 of instalment first DS intervened, the NDA found our proposal and approved it. The at the Agency added to the problem. After a personal contact in the it seemed the NDA had lost our proposal. The huge turn-over of staff we rewrote the proposal and met the NDA deadline for submissions. many over yearsof developed specialised interventions. few days. This demand failed to recognise the expertise wehave the rewrite proposal completely and submit it again within a million overatwo-yearimplementationperiod. submitted a project proposal in August 2006 for an amount of project could be done in two, and we bowedto the pressure, and project would take threeyearsto implement. The NDAinsisted the structures in marginalised and impoverishedcommunities, the ground and our experience of how long it takes to build sustainable visited the areaswetoldthe NDA that, given the situation on the it wantedustohelpbuild local community we structures. After could be implemented within one year. Itchose three areas where a capacity building programme. The NDA believed the component that we submit a proposal for providingcomponent a service for In 2006theNDA approached our organisation and suggested One CSO’sinteractionwiththeNDA,2000–2006 In November 2008 we submitted another progress report as per busy While wewerewith the initial scan in the selected We heardnothing from the NDA until March 2007. At one point Later in August 2006 the NDA came back and demanded we is thestoryofoneorganisationthathashadabadexperience However, R2 the NDAagain. payment. Our experience has meant that we donot want work with put any of its concerns in writing, but it did eventually make the final we had done was procedurally acceptable. At no stage did the NDA what that confirmed who auditors own our contacted immediately and wanted ustopay back the NDA fundsWewe hadreceived. We were management. financial told this Boardmemberwanted to sue usforbreach of contract our about upset was member Board NDA a that informally told were we us, to due payment final be an inexperienced practitioner. When we followedup on the while we waited for the Agency to pay us. The auditor seemed to had to carry out the NDA project activities with our own resources We madeourbooks available to this person, explaining that we an unannounced was made,wereceived visit froman NDA auditor. would nothavebeenassuccessful. built up in local communities would have been lost, and the project activities. payments, we had to use our own resources to carry out the project delays in NDA transparent and easytoaudit.Duethesevere to ensure that our transactions in respect of this grant would be final the in progress report. on reported been having activities project all wassubmitted despite report progress another unless payment final the balance of the contract amount. But the NDA was unwilling to make obligations payment we requested in the amount of amount the contract specified). Once we finalised all our contractual (in the amountwhich 000, wasmorethan of R424theinstalment no third payment. Finally in July athirdinstalment 2009 was made happy toamend,andwouldhavewantedknowupfront. terminology, such as our use of the word ‘impact’, which we were frustrating. The comments which were providedhad to do with making without any reporting formats which made the experience even more report, financial the substantive comments on our documents. The NDAdidnot provide including times, several 264 At about the same time as the request for the final payment final the for request the as time same the about At We hadsetup a special account for theNDAfunding earmarked The delaysmeant the project ran into athirdyear,but 2009, with Had wenot been abletodothat, the momentum we had nterview heldon1June2010. 264 I 106 000, the R106 000, 5.7. concluding comments CSOs have welcomed the fact that the NDA now has pro- Smaller, under-resourced CBOs, the very type of orga- vincial offices in some provinces. These offices are seen nisation the NDA prefers to fund, seem to have struggled as a potentially useful mechanism to establish relation- the most with accessing funds from the NDA, finding the ships with NDA grantees and engage with civil society. In application process difficult, technical and alienating. The the medium term, provincial forums could be established programme formulation method of sourcing applica- to provide a mechanism for organisations to interact tions has proven to be difficult for organisations which with the NDA at provincial level and provide feedback. have been forced into partnerships by the NDA. Some of Where they work well, these offices have been able to these partnerships have been successful and some not. publicise NDA calls for proposals, facilitate applications, Some organisations have expressed their concern about and provide monitoring and support to grantees. What the NDA unilaterally changing their proposals with no re- the provincial offices could do better is to do more to as- gard for the budgetary impact. Others have welcomed sist CBOs to complete application forms and to construct the NDA’s push for partnerships as a sign of its commit- log-frame plans. Overall, civil society feedback is that the ment to poverty eradication and desire to make projects establishment of provincial offices is a positive initiative. work.

117 118 6 MEETING THEIR MANDATES? comments concluding Findings and

T non-profit organisations, and impacting measurably on measurably impacting and organisations, non-profit mandates with respect to grantmaking, support to neither the NDAnor the NLB are meeting their legislated Africa’s developmentchallenges. agencies are realising their potential to address South The study also investigated the extent to which these to regard civilsociety organisations and grantmaking. have met, and are meeting, their legal mandates with NLDTF funds) and the National Development Agency National Lotteries Board(in its roleasagrantmakerusing service ofthelargersocialdevelopmentagenda. emphasis on supporting solution-driven conversations in impressions to a sound empirical research base, with the raised, to move the debate from a large pool of anecdotal to mobilise decided astrategic response totheconcerns the state of these two grantmaking institutions. The FPA many organisations expressing their frustrations with a periodof CSOs. Overyears,membersof the FPA heard established by the government as a conduit of funding to funds) and the NDA; indeed these institutions were such as the NLB (in its roleasagrantmakerusing NLDTF these organisations depend on funding from institutions and across various scales of operation. A large number of diary grantmakers operating in a wide varietyof sectors The FPA set out to test its key assumption, namely that The purpose of this study wastoestablish whether the NGOs, faith-based organisations and interme- of their work. These organisations include CBOs, teract with a largenumber of CSOsinthecourse he members of the Funding Practice Alliance in -

of keyconclusions. empirical the requiredbase on which to anumber draw section of organisations and experiences, and provides cross- solid a reflect does it but kind, any of sample tive held infiveprovinceswithatotalof35CSOs. and 20 CSOs;and4)separatefocus group discussions distributing agencies, NDABoardmembers, four former interviews with sixpeople who fortheNLBorits work from which 3) in-depth 226 responsesreceived); were NDA, sent to approximately 3 of applying to andengaging with the NLBand questionnaire-based focused survey on experiences CSO process thereforeincluded:2)a 1) aliteraturereview; research The efficacy. agency to obstacles and problems sound basis for drawing conclusions and identifying key organisations and individuals as possible to ensure a were made to involve the NDA, the NLB and as many and holdingdecisionmakerstoaccount. role with respect to funding practice, funding decisions, ‘watchdog’ effective an play to failing are NLB and NDA 5) that civil society representativeson the Boards of the and institution; governance effective an as functioning procedures operational internal are poor (and deteriorating); 4) that neither Board is that 3) effectively; 2) that existing reporting mechanisms are not working accountable; sufficiently held is neither that is agencies that: 1) the main reason for thepoorperformance of these development. Itfurtherwanted to test its assumptions The FPA acknowledges that this is not a representa- efforts significant process, research the Through 000 organisations 000 (and 6.1 Findings d. Both agencies, but the NDA in particular, spend heavily This research was initiated from a position of ongoing on administrative costs and there have been no (or concern over a period of years about the impact of the inadequate) measures taken to determine a reasonable funding practices of the NDA and the NLB on the many proportion of allocated funding for each agency to organisations reliant on state funding agencies for grants. cover operational overheads. The NDA’s current use The previous chapters have reflected the opinions and of more than 50% of its annual allocation to cover experiences of both grantseeking civil society organisations operational costs demonstrates that urgent steps as well as the views of members of both agency Boards. The need to be taken towards improving the flow of funds concerns are broadly summarised below in six categories. to worthy projects, enhancing cost-effectiveness, and encouraging public accountability. 6.1.1. Legal mandate: governance, e. The NDA’s already opaque operations remain obscured transparency and accountability by its refusal to participate in this research; by the a. Neither the NDA or NLB are sufficiently accountable to fact that there are no full beneficiary lists available on credible, independent oversight institutions to which its website; and by its lack of accountability either to the public have access, and to the relevant Minister, the public or to the Ministry of Social Development. in respect of financial management and organisational It is critical that the NDA be required to ensure that performance. Neither agency is held fully to account its decisionmaking, financial management, and grant- by the existing state structures, and both are often making are transparent, and that the Agency is held to neglected by the Ministers to whom they report. account for this. b. With regard to the the Miscellaneous funding cate- f. The NDA has never met its legislated mandate to: 1) gory of the NLDTF, there is no public accountability enable dialogue between civil society and the state; and mechanism to hold the Minister of Trade and Industry 2) work in partnership with civil society to investigate accountable for grantmaking decisions in respect of and tackle the real causes of poverty. In addition, the this particular fund. NDA has lost its intended independence, electing rather c. With regard to the NDA, it is apparent that this agency to toe directly the ruling party’s line on ‘development’. sets its own development agenda which shifts and g. Civil society representatives on both the NDA and changes directly in line with government policy and NLB Boards are individuals working in the civil society approach, impacting negatively on the capacity of sector. They do not have a formal civil society mandate. grant recipients to deliver on their funded projects. It therefore remains unclear how these individuals can In particular, the NDA’s project formulation approach be in a position to represent diverse civil society sector means that the NDA actively creates and then funds interests. development projects in line with its shifting agenda.

119 120 MEETING THEIR MANDATES? d. c. b. a. 6.1.2

available tothem. and respond appropriatelytothe criteriathat are organisations clearlylackcapacitytoaccess,interpret within civil society, smaller and less well-resourced diversity offocus, and organisation scope and size easily accessibletoapplicants. In addition tothe huge have been translated into funding criteriathat are Neither agency has clearfunding approaches that that DAsarecommitteesoftheNLB. confused and unclear in spite of a recentcourt ruling reporting and accountability structure that remains making capacity (as opposed to authority) in a its operations with the DAshaving broad decision- The NLB, on the other hand, remains centralised in development sector. with the experience of, and operating in, the NDA being led in its approach by the organisations projects has led to NDA-led funding rather than the co-establishes it whom with partners identified with preference for a ‘programme formulation’ approach funding the NDA’s of approach and practice. efficacy the to value added structure, this remains weak and appears not to have While theNDAhas set up a substantial provincial requirements in respectof financial statements). Department of SocialDevelopment asan NPO, and (e.g. the requirement that they beregisteredwith the put measuresin placetomeetstandard requirements ganisations for,perhaps, an interim period whilethey currently no small grants facility to support such or- implement and reporton funded projects.There is support and assistance toaccessfunding, and to that smaller, under-resourced organisations require As indicated above, itisclearfromthe research Fundingapproachandpractice In addition, the NDA’s

e. g. f.

appropriate, sector-friendly and effective funding approaches and practices. effective and sector-friendly appropriate, towards developing and implementing more broadly more society civil or and/ sector non-profit participate in any meaningful engagement with the Both the NDA and the NLB appear unwilling to existing projectpartners. processing applications for continuing funding to adjudicators spend unnecessary time preparing and by the NDAand NLB means that both applicants and The short-term, year-by-year funding approach taken project schedules delivery with any kind of certainty. their programme work or their implementation and it challengingextremely for organisations to plan reflected in the graphs in Chapters 4 and 5), has made unreliable responses throughout the cycle (as agencies’ response time aswellerraticand approach, coupled with the long delays in both proposals. The NDA’s programme formulation agencies. arelong There gaps betweencalls for implementation, are the funding cycles of both organisational planning, budgeting and programme of understanding (in both the NDA and the NLB) of on organisations and its role in highlighting a lack Of particular importance, for its negative impact access and manage NLDTF funding. access and manage NLDTFfunding. improves the capacityof organisations tounderstand, seen whether the NLB’scurrent roadshow approach were extravagant and unhelpful. Itremains tobe the research processhold that the NDAgatherings as referred to above), opinions expressed during have may been intended(that toprovidesomekind ofsupport meetings briefing or ‘roadshows’ While both the NDAand the NLBhave variouslyheld 6.1.3. Administrative structure and functions e. Overall, civil society feedback is that the NDA’s establishment of provincial offices is a positive a. It is clear from the research that organisations initiative. This has been welcomed by organisations, have, for the most part, experienced administrative which see this as a potentially useful mechanism to obstacles to accessing information when engaging establish relationships with the NDA, and for the with both the NDA and the NLB. Organisations have NDA to establish relationships with grantees and experienced both agencies as having inadequately engage with civil society. trained staff who are unable to engage with applicants on issues of development and poverty alleviation, and have limited capacity to service 6.1.4. Administrative processes applicants. a. With thousands of applications received in response b. NLB grantmaking, in its three current areas of focus to each call for proposals by each of the NLB’s (charities; arts, culture and national heritage; and three DAs, the grantmaking process is under sports and recreation), is not given the priority and extreme pressure. In spite of attempts to scan every attention it deserves. DA members work part-time, application in full, the CAO’s record-keeping remains and do not report directly to the Minister of Trade and unreliable and is not used to best effect. The result Industry as they are supposed to. The result is that is that NLB staff members do not have easy access insufficient time and attention is given to ensuring to beneficiary-specific files containing the history that these are effective grantmaking structures. It of applications, previous grant awards, and original must be noted that well-informed, strategic funding application documents. decisions require specialist grantmaking support b. The grantmaking processes of both the NDA and staff who have knowledge, skills and experience of NLB were described by many respondents as opaque key development issues, know the sector well, and and inaccessible. There are no predictable timetables are familiar with the key stakeholders. for calls for proposals, and neither agency can be c. Neither the NDA nor the NLB have professional staff said to have a clear methodology. A process map to assist in application processing. This exacerbates and timeframes for grantmaking are necessary so an already bad situation in which responses to that everyone understands the process and their applications take unacceptably long, and sometimes roles and responsibilities, including members of NDA applicants do not receive responses at all. and NLB grantmaking staff. This also applies to the d. While some organisations have complained about the appeals processes currently in place at the NLB. The NDA unilaterally changing their proposals in line with NDA currently has no appeals process for rejected its programme formulation approach with no regard applications. for the budgetary impact, others have welcomed the NDA’s focus on grantee partnerships as a sign of its commitment to poverty alleviation and its desire to ensure that projects work.

121 122 MEETING THEIR MANDATES? e. d. c.

future. in to order assist them to submit better proposals in the NLB (whereapplicable) clear feedback provided unsuccessful were thatreported neither the NDA nor The majority of respondents whose applications pay agreedgrantmoneys. Orchestra have taken the NLB to court to force it to cases, organisations like the Johannesburg Festival existence very of these organisations. of project implementation) have threatenedthe and insecurity (around funding and the timing been so in severe some cases that the anxiety Delays in disbursing funds to organisations have but these are morethe exception than the norm. applications have been processed with no delays, have beenafeworganisationsThere whose NLB years tobefinalisedonewayortheother. The entireapplication process can take up to two grant payment when applications have been successful. effecting in delays further and applications, year. Theconsequence is long delays in adjudicating submitted applications – sometimes taking up to a in providing receipts and reference numbers for submitted. A common experience is lengthy delays the supporting and problems begin once applications have been in fill documents are standard,applicants’ required to easy considered While the NLB’s application forms are generally In extreme

g. f. b. a. 6.1.5. Civilsocietyengagement

seems removedfromthesectorthatitisfunding. Organisations expressed the view that the NLB and fundingpractice. on the development of priorities, policies, criteria consultation with and engagement with civil society issues. This could be achieved through more effective those organisations that can these best address and under-development so that they can target informed understanding of the causes of poverty The NDAandtheNLBshoulda more develop partnerships bytheNDAasaconditionofgrant. organisations which have been to required go into of sourcing applications has proven to be difficult for technical and alienating. The programme formulation method difficult, process application the finding have struggled the most with accessing NDA funds, of organisation the NDA to prefers fund) seem to trend definite a that smaller, under-resourcedCBOs (the very type is there NDA, the to regard With enhance institutionalaccountability. participate in policy and decision making, and to on their boardsfor civil society representatives to Both the NDA and the NLB should provide space

6.2 concluding comments Civil society plays a critical role in an effective democracy • Civil society expectations of these funding agencies in and should be understood to be an important actor terms of funding approach and practice, and building in shaping the type of world that citizens want to live development partnerships, and in terms of mutual in, including providing support for citizen agency and accountability and agency compliance with their participation in overcoming underdevelopment. For this mandates. sector to be transformationally effective, the quality of • The operational efficacy of both agencies with regard relationship between state funding agencies (such as the to criteria for funding in respect of both the NLDTF NDA and NLB) and the non-profit development sector and the NDA, time frames in terms of applications, must improve. This relationship is not just about money notification and payments, responses to queries, and and compliance, but is also fundamentally about effective appeals. collaboration between organisations and funding agencies. • Transforming the relationship between civil society organisations and state funding agencies towards more Key areas requiring the ongoing attention of civil society effective support to, and strengthening of, a vibrant organisations, as well as the NDA and NLB are: civil society that plays an active role in determining • Addressing the shortcomings of the legislation that approaches to poverty alleviation. underpins the mandates of the NDA and the NLB in • Positioning both state funding agencies as key to the order to address those areas where these agencies development, non-profit and funding sectors and have failed to meet their legal mandates. recommending ways of developing more accountable • The development of significantly improved mecha- and effective state agency-civil society partnerships. nisms to enhance the NDA and NLB’s contribution • The need for civil society to organise itself more to development and their contribution to enhancing effectively to contribute to improved NDA and NLB the ability of non-profit organisations to achieve their grantmaking policy and practice. poverty alleviation objectives. • The composition of the boards of the two agencies, It was the intention of this research project to provide the their functioning, the participation of civil society research-based evidence on which CSOs, the NDA and the in setting up the boards, including ensuring these NLB could variously and jointly engage. It is hoped that this governance institutions have the necessary skills and a engagement will not be limited to improving the flow of sound orientation towards development, and ensuring funding, but will also contribute to best practice develop- that these boards are accountable to both the state mental grantmaking in South Africa. and civil society. • NDA and the NLB expectations of beneficiary organisa- tions in terms of relationship, compliance, and impact.

123

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Appendices Appendix 1: A chronology of communication with NDA

DATE INTERVENTION 23 April 2010 § Met with Prof. Ewang (Head of Research and Development) and Nkhensani Mthembi (National Grants Manager) 25 April 2010 § Sent Prof. Ewang an e-mail introducing the research team, our approach to the research: ‘our approach to the research is to allow for all sides of the story to be told, i.e. both the NDA and civil society’s views and experiences so that these can be reflected on in a constructive manner that can result in solutions. Whilst we will use the interviews as a place for reflection (and in the case of the NDA, a focus on institutional memory) we are also going to approach the interviews with a forward looking view and also focussing on the bigger vision for sustainable grant-making in South Africa.’ § Requested interviews with key NDA people including the acting CEO, people involved in grantmaking and members of the Board. § Requested access to documents relating to beneficiaries, including the impact assessment and their assessment of the state of civil society 5 May 2010 § Follow up e-mail to Prof. Ewang. 10 May 2010 § Follow up telephone call to Prof. Ewang in which he indicated he did not receive the e-mail of 25 April. Resent that e-mail. 11 May 2010 § Prof. Ewang replied to e-mail, saying he is processing our request. 14 May 2010 § Prof. Ewang sent e-mail requesting the research proposal, data collection instruments and ethical clearance. 19 May 2010 § Documentation sent to Prof. Ewang as per his request. 21 May 2010 § Follow-up telephone call to Prof. Ewang. No answer, left message. 24 May 2010 § Follow-up telephone call to Prof. Ewang in which he said he was busy and was unable to speak at that time. 26 May 2010 § Follow-up e-mail to Prof. Ewang. 1 June 2010 § Follow up telephone call to Prof. Ewang who indicated that we should resend an e-mail emphasising the urgency of our request. Sent e-mail to say research was timebound. 7 June 2010 § Follow up telephone call to Prof. Ewang who said he did not receive the documentation sent on 19 May. Resent e-mail and documentation. 8 June 2010 § Received e-mail from Prof. Ewang saying e-mail had no attachments. Resent e-mail again. 21 June 2010 § Follow up telephone call to Prof. Ewang and follow up e-mail sent.

129 130 MEETING THEIR MANDATES? 19 August2010 13 August2010 9 August2010 4 August2010 29 July2010 28 July2010 27 July2010 26 July2010 21 July2010 15 July2010 14 July2010 1 July2010 30 June2010 24 June2010 § § § § § § § § § § § § § § § § § § Sent followupe-mail. Follow uptelephonecalltoTshepo NkoeandRashidaIssel.Noanswer,leftamessage. Sent followupe-mail. Follow uptelephonecalltoTshepo NkoeandRashidaIssel.Noanswer,leftamessage. Follow uptelephonecalltoTshepo NkoeandRashidaIssel.Noanswer,leftmessage. Follow uptelephonecalltoTshepo Nkoe.Noanswer.Sente-mailreminderaboutletter. fice untilwereceivedtheletter. either on30Julyor2Augustregardingourrequest.We weretoldnottocontacttheof Received voicemessagefromTshepo NkoesayingthattheNDAwouldsendusaletter Follow uptelephonecalltoTshepo Nkoe.Noanswer,leftmessage. Follow uptelephonecalltoTshepo Nkoe.Noanswer,leftmessage. the CEO. RashidaIssel,whowasonherwaytomeetwith CEO andhewasabouttobrieftheCOO, Follow upphonecalltoProf.Ewangwhoindicatedthathehadgivenourrequestthe that thenewCEOhadnotreceivedourrequest,andhewasgoingtobriefO. Follow uptelephonecalltoProf.EwangwhoindicatedthattheNDAhadanewCO, address forTshepo Nkoe,herpersonalassistant. Also foundoutthattheNDAhadanewCEO,Vuyelwa Nhlapo,andweregivenane-mail i.e. Prof.Ewang. Explained theproblemandweretoldtogobackpersonwhowasourcontact, personal assistantwhosaidthattheChairpersondoesnothaveanofficeatNDA. Called NDAandaskedfortheChairpersonofBoard.PutthroughtoCEO’s Called back–noanswer. and weshouldcallhimback. Follow uptelephonecalltoProf.Ewangwhotookthebutsaidhewasinameeting lay withProf.Ewang. Also calledNkhensaniMthembitoseeifhecoulddoanything.FPA wastoldthematter Followed upwithe-mailrestatingwhathehadsaid. quest totheBoardandadecisionwouldbemadesoon. Follow uptelephonecalltoProf.Ewangwhoindicatedthathehadsubmittedourre Follow uptelephonecalltoProf.Ewang.Noanswer,leftmessage. Follow uptelephonecalltoProf.Ewang.Noanswer,leftmessage. -

- 23 August 2010 § Follow up telephone call to Tshepo Nkoe and Rashida Issel. No answer, left a message. Sent follow up e-mail. 24 August 2010 § Follow up telephone call to Tshepo Nkoe and Rashida Issel. No answer, left a message. Sent follow up e-mail. 25 August 2010 § Follow up telephone call to Tshepo Nkoe and Rashida Issel. No answer, left a message. Sent follow up e-mail. 27 August 2010 § Received e-mail from Rashida Issel saying the NDA has decided not to participate in the research. 27 August 2010 § Sent e-mail to Rashida Issel thanking her for her e-mail and requesting reasons for the decision. No response to date. 8 October 2010 § Called the new CEO’s office but was told she was unavailable. Sent e-mail to the new CEO, Vuyelwa Nhlapo, explaining the research project and process thus far and request- ed a meeting to brief her. 11 October 2010 § Repeated follow up telephone call to Ms Nhlapo’s office – no answer. 12 October 2010 § Repeated follow up telephone call to Ms Nhlapo’s office – no answer. 15 October 2010 § Follow up telephone call to Ms Nhlapo’s office and was told she was not available. Left message. 20 October 2010 § Repeated follow up telephone call to Ms Nhlapo’s office – no answer. 25 October 2010 § Follow up e-mail to Ms Nhlapo referring to e-mail of 8 October and requesting a response. § Received e-mail response from Ms. Nhlapo agreeing to a meeting with FPA partners and saying her office would be in touch to set up a meeting. 26 October 2010 § Follow up telephone call with Ms Nhlapo’s office to set meeting date. No answer. 27 October 2010 § Follow up telephone call with Ms Nhlapo’s office to set meeting date. No answer. 28 October 2010 § Follow up telephone call with Ms Nhlapo’s office to set meeting date. No answer. 29 October 2010 § Follow up telephone call with Ms Nhlapo’s office to set meeting date. No answer. 2 November 2010 § Received e-mail from current Board member, David Adler, indicating that the Board had taken a decision not to participate in the research and withdrawing his original agree- ment to be interviewed. 4 November 2010 § Follow up e-mail to Ms Nhlapo, Rashida Issel and the CEO’s personal assistant referring to the CEO’s e-mail of 25 October and requesting a date for the meeting. § No response received from the CEO or the NDA since the CEO’s e-mail dated 25 October 2010.

131 132 MEETING THEIR MANDATES? 6. 5. 4. 3. 2. 1. T Appendix 2: opic:

helenLamoela,DemocraticAlliance’sShadow

on 12October2010. Board (2003–2007).Telephonic interviewconducted Annemarie Hendrickz,formermemberoftheNDA Interview heldon12October2010inCapeTown. of thePortfolioCommitteeforSocialDevelopment. Deputy Minister of Pretoria. (2003–2007). Interviewheldon19October2010in Dr StephenRule,formermemberoftheNDABoard telephonic discussionheldon8November2010. Interview heldon12October2010inCapeTown and the PortfolioCommitteeforSocialDevelopment. Minister ofSocialDevelopmentandMember Patricia Kopane,DemocraticAlliance’sShadow 2010 inPretoria. Board (2003–2007).Interviewheldon19October Dr Temba Masilela,formermemberoftheNDA held on12October2010inCapeTown. who wishedtoremainanonymous.Interview Former memberoftheNDABoard(2003–2006) TheNDA List ofinterviewsandfocusgroupdiscussions Social Development and Member

6. 5. 4. 3. 2. 1. T opic:

gideonSam,Chairpersonoftheportsand

August 2010. National LotteriesBoard.Interviewheldon11 Prof. Vevek Ram,ChiefExecutiveOfficerofthe 2010. Distributing Agency.Interviewheldon6August Dr Teboho Maitse, ChairpersonoftheCharities on 6August2010. and HeritageDistributingAgency.Interviewheld Prof. DorcasJafta,ChairpersonoftheArts,Culture Lotteries Board.Interviewheldon8October2010. Zodwa Ntuli,Minister’snomineeonNational 6 August2010. Recreation DistributingAgency.Interviewheldon held on5August2010. Head oftheCentralApplicationsOffice.Interview Jeffrey duPreez,NLBChiefOperationsOfficerand TheNLB

Topic: Civil society

• In-depth interviews

Date of interview Organisation Person interviewed 18 May 2010 Zakhele Trust Melanie Waugh, Gladness Gcaba 19 May 2010 University of Pretoria Ninette Mouton, Linda van Wyk 19 May 2010 Pietermaritzburg Agency for Christian Social Awareness Gita Dickinson 20 May 2010 Durban Association for the Aged Mr J Narainsamy 20 May 2010 Community Law and Rural Development Centre Langa Mtshali 20 May 2010 The Johannesburg Festival Orchestra Paul Rodgers 20 May 2010 Visual Arts Network of South Africa Joseph Gaylard 20 May 2010 Sinamandla Phil Donnell 24 May 2010 Siyakhula Trust Gill Fenwick 24 May 2010 Matatiele Advice Centre Nonzwakaze Nyamakazi, Allen Nkomo 25 May 2010 Umtata Child Abuse Resource Centre Priscilla Sipuka 25 May 2010 Ntataise Lowveld Trust Barbara Kenyon 26 May 2010 President’s Award for Youth Empowerment Martin Scholtz 26 May 2010 Standerton Advice and Development Resources Centre Amon Zwane 27 May 2010 Eastern Cape Philharmonic Society’s Music Investment Project Gerda Coetzee, Gillian Barnett, John Barnett 27 May 2010 Langa KwaNobuhle (Self Help and Resource Exchange – SHARE) Nominise Gogo 28 May 2010 Project Literacy Andrew Miller 1 June 2010 Kubonakele Human Rights and Justice Centre Mr Hendrick 1 June 2010 Community Based Development Programme Colin Smuts 4 June 2010 Cotlands Rochelle van Heerden

133 134 MEETING THEIR MANDATES? • 20 July2010 Western Cape 16 July2010 Gauteng Province/ Date Focus groupdiscussions Community DevelopmentResourceAssociation Rural EducationAssistanceProject Inyathelo West CoastCommunityFoundation Sikhula onke Early LearningResourceUnit Labour ResearchServices South AfricanEducationProgramme Social ChangeAssistanceTrust Self HelpandResourceExchange Black Sash University ofWitwatersrand Khunwana OldClinic(NorthWest province) University ofPretoria Restorative JusticeCentre Legal ResourcesCentre Johannesburg ChildWelfare Organisation James Taylor Glenda lover Shelagh Gastrow Fred EarlWilliams Wendy Wiemers Frida Brock Saliem Patel Jane Keene,LauraPugliese Joanne Harding Lin Helme Marcella Naidoo, Suraiya Baccus,PoovenNaicker Ismael Nage Ninette Mouton,LindavanWyk Mike Batley Annette Reed Brian King Person inattendance Sonya Ehrenreich • Focus group discussions continued

Province/ Date Organisation Person in attendance Eastern Cape The President’s Award Michele Barnard 28 July 2010 Public Service Accountability Monitor Jay Kruse Border Rural Committee Charmaine Cockcroft Ikhala Trust Bernie Dolley Limpopo Mankweng Advisory Centre John Mabokela 29 July 2010 Bloodriver Advice Office Lettah Mokhabhoa Keep the Dream 196 Louise Batty South African National Council on Alcoholism and Drug Riette van der Linde Dependence (SANCA) Far North Choice Trust Elsie Tiba Ntokoto Health Education Organisation Alinah Mabunda, Salphinah Mnisi KwaZulu-Natal Pietermaritzburg Agency for Christian Social Awareness Gita Dickinson 30 July 2010 (PACSA) Built Environment Support Group (BESG) Cameron Brisbane Diakonia Kudzai Taruona Hlomelikusasa Zandile Malinga Operation Upgrade of SA Vasu Moodley Lamontville Foundation Themba Blose Community Law and Rural Development Centre Langa Mtshali SaveAct Anton Krone

135