One group of organisations that has been affected severely by the five-year old recession are those that are dependent on donor funding and sponsorships. Obviously, when the belt has to be tightened it is the non-production costs that go first, such as giving and marketing, which go hand in hand.
In South Africa, Socio-Economic Development (SED), internationally better known as corporate social investment (CSI), and Enterprise Development (ED) legislation with regards to the BEE scorecard and tax breaks enforces giving to a certain extent but, even so, if profits and cash flow are under pressure, giving is no longer an option, regardless of legislation; especially as there is no penalty for not being compliant with the BEE scorecard (other than not being able to do business with certain entities).
No money for food
The general feeling in the market is that there will still be enough of a client base if the business can survive at all and that means decreasing cost to below turnover, minus cost of sale and fixed costs levels. The result of this is that organisations such as Feed a Child - a national charity organisation that assists many community projects, especially in the provision of food, water, education, medical services and healthcare - have to look thousands of children in the eye and tell them there is no money for the food they were getting from the organisation.
In December the Department of Education stopped their feeding programme leaving vulnerable children, most of whom receive their only meal of the day at school, to fend for themselves. Across South Africa, a total of 8,472 children were without food during the school holidays; no food at all, never mind worrying about a Christmas meal. Such food can be acquired at R2.50 per meal, but across 41 days over the holidays this requires a budget of R 868,380.
Benefits of giving
Arnau van Achterbergh, managing director of Feed a Child warns that this does not represent the entire need, but just the children fed by Feed a Child on an ongoing basis. The need therefore is much bigger. "There are benefits to giving, over and above the normal feel good and altruistic motives," says Van Achterbergh. "These benefits include being listed on the Feed a Child digital media, a Section 18A certificate making the donation tax deductible, BEE points, branding and marketing opportunities and investment in a future market. Corporate function venues are still fully booked with company year-end parties. If companies can cut a small portion off these elaborate budgets, perhaps the children can be fed."
In January, Times Live reported that while South Africa produces sufficient food the high price of food prevents the poor from getting adequate nutrition. A five-year study by the University of Cape Town's African Food Security Unit Network exposed a food crisis that constitutes a 'death sentence' for many and which the government has labelled as 'serious'. It also found that in Johannesburg 43% of the poor faced starvation and malnutrition.
Education, entrepreneurial solutions and health projects are all futile if the people are hungry and malnourished.
Donors can Feed a Child by visiting the Feed a Child website at www.feedachild.co.za