Subsidy cuts to NPOs leave SA’s most vulnerable unprotected

The Gauteng Department of Social Development’s severe budget cuts are forcing numerous Non-Profit Organizations (NPOs) to shut down, impacting services for abused women, children, the disabled, vulnerable elders, the unemployed, and the homeless.

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By Chris Steyn

“Severe” budget cuts by the Gauteng Department of Social Development is forcing many Non-Profit Organisations (NPOs) to close its doors to abused women, children in need of protection, the disabled, vulnerable elders, the unemployed, and the homeless.

The devastating impact of the government’s subsidy cuts is laid bare in a statement by The Gauteng Care Crisis Committee, a voluntary association of 67 NPOs formed during the “crisis caused by the GDSD’s attempt to impose severe budget cuts on NPO social care service in 2023/24”.

These Gauteng NPOs – “shattered and utterly disheartened by the Department of Social Development’s handling of their subsidies” – says communities need services now, not the department’s “public relations messages”.

The Gauteng Care Crisis Committee says the start of the new 2024/25 financial year for the GDSD on 1 April “was the end of the road” for many non-profit organisations (NPO) in the province.

“Having depleted their subsidies for 2023/24, and with no indication from GDSD as to whether they would receive subsidies in the new financial year, they have been forced into closing – both permanently and temporarily.”

This is the second consecutive year that the GDSD’s “tardy decision making” has caused a crisis in the NPO social care sector.

“In June 2023 it was already apparent to NPOs that the delayed decision-making and budget cuts characterising the start of the 2023/24 financial year would likely repeat in 2024/25. Letters written since to the senior leadership in GDSD requesting clarity around the department’s threat to take over services, as well as reduce funding, have – at best – only been acknowledged as received. The remainder have gone unanswered.”

Instead, in March this 2024, the GDSD started responding to its questions via a series of press releases. “In their first release of 7 March the GDSD instructed NPOs to be patient and to wait for the department to complete a forensic audit of the sector. While the audit was announced by the Premier in May 2023, the GDSD only initiated the process in October, ensuring that a process intended to uproot the mismanagement of funds by some GDSD officials and NPOs has resulted in the destruction of services. This is because the GDSD ignored the impact on organisations of having to function for a month without their subsidies. NPOs’ subsidies are paid on a quarterly basis in advance. With the final instalment of their 2023/24 subsidies having been paid in January, organisations’ funds were exhausted by March.

“Then, on 15 March, the GDSD attempted to obtain an urgent interdict preventing NPOs from participating in a sit-in that never was, as well as from ever meeting to discuss protest. When that was dismissed outright by the court, the GDSD resorted, on 20 March, to claiming that NPOs were conspiring with the Democratic Alliance to cause panic in the province around the imminent cuts to their budgets.

“NGOs do not have time to engage in Gauteng’s election politics. Their priority is, and has been, the wellbeing of their beneficiaries, the survival of their services, and the futures of their staff.”

Please read the impact statements of 18 Gauteng NPOs – in their own words – here:

Meanwhile, in the Western Cape, another impact statement – headlined: “National Treasury Budget Cuts Seriously Threaten Essential Disability Services” – was issued.

Compiled by The Western Cape Network on Disability (WCND), Western Cape Forum for Intellectual Disability (WCFID), Shonaquip Social Enterprise, and 70 organisations for persons with disabilities, it states that “22 organisations (31.4%) indicated that they would be likely to close if funding from DSD was withdrawn, and a total of 52.9% of respondents rated themselves above 7 on a scale of 1 to 10 regarding the likelihood that they would close their doors if funding is withdrawn”.

It warns: “…these cuts will leave hundreds of persons with disabilities and their families stranded in terms of essential care and services. This will result in physical and psycho-social harm for persons with disabilities, increased unemployment and educational inequity for this population, as well as other risks related to food security and safety from potential violence in the family or community. These cuts will also lead to large-scale job losses among NPO staff, some of whom are themselves persons with disabilities”.

Please read Western Cape Impact Statement here:

One of the affected organisations is Camphill Farm Community in Hermanus.

Parents and guardians were informed of this in a recent Newsletter from Executive Manager Kurt Mätschke.

“You might have seen from last year’s news reports that the subsidies in Gauteng and KZN have been cut by 80% and in many cases, facilities have had to close their doors.

“I was not expecting this to happen in the Western Cape, but we have been receiving messages from the DSD (Department of Social Development) indicating that the same situation is about to unfold here.”

Read The Camphill newsletter here: