Release systemic chokes that trap us in inequality

Social Welfare Financing Reform

DGMT’s strategy aims to improve civil society’s access to funding through an improved financing approach of the national Department of Social Development (DSD). Since 2013, DGMT has worked with the DSD and National Treasury to develop the Sector Funding Policy (SFP) and its tools for implementation.

Vuyokazi Kana takes her daughter to attend a playgroup in Duncan Village. Groups like this can benefit from the Social Welfare Financing Reform.

The disconnect

This explains why the project exists

This project was conceptualised to unblock some of the systemic constraints undermining the sustainability of social services to the most vulnerable. As NPOs deliver the bulk of social services, ensuring their sustainability is critical for vulnerable populations. But, as it stands, the current system is perpetuating the inequities of our country’s past.

Poor long-term planning

A coherent financing plan should contain a method to determine the demand for social services and for calculating costs; appropriate norms and standards; as well as the extent and scope of the government’s obligations to fund these services.

Inefficiencies in government

NPOs deliver the bulk of social services on behalf of the government, yet provinces lack the administrative and personnel capacity to monitor and evaluate the services offered by NPOs or to administer the funding in an adequate manner. Inefficient and ineffective administration results in increased costs for NPOs ¹.

In addition, delays in transfers from the government threaten the viability of NPOs and their ability to deliver services to vulnerable persons, while the lack of efficiency on the part of some provincial departments makes accessing financing difficult.

Poor social welfare financing

State funds are not being utilised optimally for the benefit of the most vulnerable. The present delivery model is broad and unclear on many aspects of services, making the funding inappropriately targeted with no clear focus.

In addition, provinces are not adequately targeting smaller NPOs, particularly those operating in urban informal settlements and rural areas that often do not have the ability or resources to meet stringent criteria to qualify for, and report on, government funding.

The majority of South Africans are stuck in an inequality trap with wealth concentrated in the hands of a few. Most are stuck in intergenerational loops of exclusion with few chances to escape. Breaking this cycle requires a fundamental change in life trajectories, starting in the womb.

Think of a Möbius strip – just one twist in the circle allows you to trace a completely different pattern. Instead of being stuck on the inside of a loop, you emerge on the outside. In the same way, escaping the inequality trap requires a fundamental twist to set South Africa on a new path.

The twist in thinking

This explains how the project approaches problems

We are driving the development and implementation of the following policy options to change the status quo:

Improve efficiencies and effectiveness.
Build towards increased funding.
Reduce service delivery disparities, improve access and achieve cost efficiencies.
Improve resource targeting.

The trajectory change

This explains what the project is doing to make a difference

The key strategy of the next phase of this project seeks to drive change management to ensure the implementation of the Sector Funding Policy (SFP) and ensure the design of an integrated approach to deliver a core package of services. We aim to ensure that provinces are geared to finance and support NPOs appropriately and deliver services effectively and efficiently.

The next phase will focus on effective policy design and implementation through piloting SFP implementation, developing a model for implementing ‘game-changing’ prevention and early intervention services, improving NPO engagement with the SFP and funding the approach for new priorities. These include determining the costs of social services, implementing an integrated service delivery model, as well as data collection and the necessary warehousing requirements.

Trying to change life trajectories is ambitious and profound. It requires us to radically influence the lives of individuals and to be part of changing the circumstances in which they live.