1. SOCIAL DEVELOPMENT FUNDING OF WELFARE SERVICES
01 NOVEMBER 2017
PORTIFOLIO COMMITTEE
CAPE TOWN

2. Presentation Outline Purpose Background Funding for welfare Services
Disparities in the funding of welfares in NPOs
Gauteng funding issues
Conclusion

3. Purpose
To brief the Portfolio committee on the funding of welfare services and funding of NPOs

4. Background
Historically, social services have been the joint responsibility of DSD and the NPO sector
The critical role that the NPO sector has played over the years in service provision is acknowledged by DSD.
The importance of the partnership between DSD and the sector is informed by the constitutional, legal and international obligations as well as policies and programmes that are central to the mandate of the department.
These, collectively contribute immensely towards the creation of an enabling environment for the effective delivery of developmental social services.

5. Background ( Cont.….)
DSD policies and legislative frameworks has created a conducive climate for the Department of Social Development to achieve its mission, particularly regarding the equitable distribution of resources.
The White Paper for Social Welfare (1997), continues to serve as an overall guide for the delivery of developmental social welfare services that are accessible and equitable for all South Africans and central to this, is the an effective partnership between DSD and the NPO sector.
This partnership remains critical towards the realization of the key priorities of the Department and Government as a whole

6. The NPO sector in SA Type of Organisation Registered
Voluntary Association (Vas)
Not for Profit Companies (NPCs)
8 928
Charity Trusts
2 660
Total

7. Registration by Sector
Registered %
Social Services
68 708
39.0
Religion
23 804
13.5
Education and Research
10 332
5.9
Law, Advocacy, and Politics
4 074
2.3
Development and Housing
39 543
22.4
Culture and Recreation
11 366
6.5
Environment
1 913
1.1
Health
13 006
7.4
International
110
0.1
Business and Professional Associations, Unions
1 780
1.0
Philanthropic intermediaries and voluntarism promotion
1 545
0.9

8. Social Services Breakdown
Objective
# of NPOs
Services to Children
43 990
Youth Services
10 034
Self-help
1 274
Family services
1 039
Services to people with disabilities
3 065
Income Support and Maintenance
2 671
Services to the elderly
6 139
Emergency and Relief
496
Total
68 708

9. Provincial Sector BreakdownFS GP
KZN
Lim
Mpu NW NC WC
Totals
Social Services
6 703
3 684
19 910
13 218
8 468
5 684
4 377
1276
5 388
68 708
Development and Housing
3 729
1 782
11 981
7 964
3 675
2 460
2 420
788
4 744
39 543
Religion
1 238
1 124
9 669
4 043
1 685
1 760
1 303
462
2 520
23 804
Health
1 116
711
3 335
2 773
1 622
1161
988
288
1 012
13 006
Culture and Recreation
720
504
4 215
1 551
865
829
923
286
1 473
11 366
Education and Research
1 668
446
3 057
1 641
922
654
561
201
1 182
10 332
Law, Advocacy, and Politics
401
204
1 399
641
197
250 79
615
4 074
Environment
120 76
475
356
113
103 38
382
1 913
Business and Professional Associations, Unions
148 64
760
216 85 98 88 27
294
1 780
Philanthropic intermediaries and voluntarism promotion
105 54
599
259 49 37 41 17
384
1 545
International 1 2 70 9 4 3 18
110
15 949
8 651
55 470
32 565
18 019
12 994
11 057
3 464
18 012

10. Funding of NPO in DSD
The Department has implemented the policy of financial awards policy as a guide to fund NPOs in the sector
During the implementation of the Policy on Financial Awards (PFA), the following challenges were identified:
Disparities in the funding of same services across the different provinces.
Different approaches by provinces to the management and administration of funding of NPOs.
Non-compliance of some NPOs to the NPO Act and other pieces of legislation.
Lack of alignment to service delivery norms and standards.
Lack of capacity within the NPO sector.
Gross underfunding of the welfare services and the funding of the welfare NPO sector
Slow transformation within the NPO sector

11. Solutions to the challenges
Central to this partnership, is to define the partnership that is based on mutual understanding in the provision of services
The current partnership with the NPO sector is based on financial support
The current sector realities demand that:
DSD get funded according to its mandate and costed policies and legislations including the norms and standards,
Treasury should review the funding model of welfare services to ensure that there is equitable provision of services especially to historically disadvantaged communities.
DSD is currently finalising the following policies
The sector Funding policy
The State and civil society organisations partnership model
The DSD financing models (Considering the existing models)

12. Provincial Budget Analysis Children and Subsidies

13. Total Provincial Social Development Allocation
Average growth rate overall for PDSDs is more a less in line with inflation over the medium term.
Goods and services growth below inflation in the past, in line with inflation in the future
Social Welfare Services growth improving compared to past years
High historical growth rates in Children and families and Restorative services due to expenditure not allocated correctly according to new budget structure in the past
Growth in Children and Families driven by ECD, which is expected to grow by 8.3 per cent per annum on average of over the MTEF
Services to older persons makes up the largest portion of SWS, followed by management and support and HIV/AIDS
What explains growth in Development and Research?

14. Distribution of allocation across Programmes, 2017/18
The largest proportion 38% continues to be spent on Children and families followed by social welfare and then Admin.
All provinces spend the largest proportion of their budget on Children and Families, with the exception on WC and NW who spend the largest portion on Social Welfare Services
GT spends the largest proportion on children and families, followed by LIM and KZN
NC spends the largest proportion on Restorative services and development and research.
Admin % particularly low in GT and WC. FS highest %
Do high proportions reflect the priority in that province?

15. Key sub-programmes
Low spending on crime prevention and support and victim empowerment is worrying
HIV/AIDS shows significant increase over MTEF overall. Why?
Substance abuse?

16. % Share of sub-programmes of total allocation
This gives a picture of where the prioritises of the sector lies in terms of funding allocation- is this where the sector is looking to focus on?
Most provinces still spend the largest proportions of their budgets on ECD and Partial Care and on Management and Support. Are sws still paid through management and support? Allocation of staff to correct subprogrammes still an issue?
Free State, Gauteng and Limpopo spend a much lower proportion on M&S than other provinces – however Limpopo has increased the proportion allocated under ‘other’.
It appears that GT and FS are budgeting correctly, allocating staff to appropriate subprogramme
Isibindi is a priority area, but gets a minimal allocation proportionally.

17. Per Capita Expenditure: Children (excluding ECD and Partial Care)

18. Transfers to NPO’s
R’000

19. Transfers to NPO’s

20. Transfers to NPO’s for Children

21. Some Analysis and Proposals on 2016/17 Budget

24. Analysis of per capita expenditure

26. Scenarios to move to greater equity in spending for DSD

28. FUNDING OF NPOS IN GAUTENG

29. Legislative Framework Guiding NPO Funding
General legislative framework that influences our environment vs legislation that permits or mandates the funding of services
The general legislative framework creates an enabling, non-restrictive environment for the funding and management of NPO transfers
Constitution provides legal mandate for the existence of Social Development as a Department;
PFMA and Treasury regulations provides financial management framework;
NPO Act gives legal existence of organisations that the Department partner with;
Other Acts are supporting frameworks to be taken into account;
The Policy on Financial Awards which is currently under review by National Social Development provide guidance on approaches or types of funding, administrative processes, etc

30. NPO Transfers From 2015/16 to 2017/18 Financial Year
STATEMENTS OF TRANSFERS TO NON PROFIT INSTITUTIONS
2015/16 FINANCIAL YEAR
2016/17 FINANCIAL YEAR
2017/18 FINANCIAL YEAR
Programme
Sub_Programme
Actual Transfer
Total allocated Budget
SOCIAL WELFARE SERVICES
CARE & SERVICES TO OLDER PERSONS
SERVICES TO PERSONS WITH DISAB
88 464
94 756
HIV AND AIDS
SOCIAL WELFARE SERVICES Total
CHILDREN AND FAMILIES
CARE & SERVICES TO FAMILIES
CHILD CARE & PROTECTION
16 655
10 890
19 150
COMM BASED CARE SER FOR CHILDREN
CHILD AND YOUTH CARE CENTRES
ECD & PARTIAL CARE
CHILDREN AND FAMILIES Total
RESTORATIVE SERVICES
CRIME PREVENTION & SUPPORT
92 551
82 551
85 390
VICTIM EMPOWERMENT
57 226
65 294
67 767
SUBST ABUSE,PREV&REHAB
88 764
RESTORATIVE SERVICES Total
DEVELOPMENT & RESEARCH
INSTITUTIONAL CAP&SUPP FOR NPOS
20 000
20 700
20 190
POVERTY ALLEV&SUSTN LIVELIHOODS
WOMAN DEVELOPMENT
17 261
9 030
14 350
YOUTH DEVELOPMENT
5 750
23 128
24 035
DEVELOPMENT & RESEARCH Total
Grand Total

31. Highlights of Transfers over 3 financial years
6% subsidy increments were implemented for the past three financial years to minimise the negative impact of inflation;
Innovative programmes such as non-centre based in un-serviced areas, mobile services, independent living model for people with disabilities, active aging prg etc were introduced as game changers in the sector;
Implementation of Isibindi model which seek to address the Child & Youth Care Worker skill shortage in the children sector;
Various support programmes targeted at ECDs such as standardised nutritional meals, OHS Equipment, minor renovations, psychometric assessment of children, etc;
In line with the provincial priorities, expansion of various sustainable livelihoods prgs such as welfare to work, dignity packs, food banks, school uniform, women development, etc were funded;
Completion of various social infrastructure (Proto-type) projects for occupation by selected organisations as part of addressing the infrastructure challenges;
Financial bail-outs to organisations in financial distress due to shrinking of donor funding particularly National Lottery;

32. Funding Model for Child Welfares
For 2017/18 financial year, Gauteng DSD will be funding 122 welfare NPOs providing families services with a budget of R133 million;
The main subsidy goes towards the professionals below:
GDSD provides post-funding with related administrative costs and the 2017/18 annual rate after 6% increment is as follows:
Over and above post-funding, GDSD provides limited programme funding focusing on professional psychological services to augment the social work services;
Social Work Managers
Social Work Supervisors
Social Workers
Social Auxillary Workers
Total Professionals 22 99
441
237
799
Social Work Managers
Social Work Supervisors
Social Workers
Social Auxillary Workers
Admin Costs per Worker R
Including admin R R R
R31 038

33. Why not fund statutory services 100%
Financing through the Policy in Financial Awards:
The Department recognizes that it is not the sole funder of services to the poor and vulnerable sector of the community.
Funding is provided with the understanding that organizations do and will raise funds from other sources such as other state departments, donor organizations, corporate social responsibility programmes from the private business sector, through trusts and foundations and the proceeds from lotteries.
The current amendment of the Policy on financial awards seeks to provide a fair, equitable and transparent method of determining the contribution of NPOs to the cost of social welfare services provisioning;
Since the start of 2015/16 financial year, GDSD has ceased to fund additional social work posts to the NPOs and any additional cases will be directed to the Department;
The Strategy is to reduce reliance on the NPO sector on implementation on statutory services and to gradually take over the function.

34. DSD Plans to address the shortcomings
National Social Development has reviewed the White Paper and funding of social services is one of the critical areas;
Revision of Policy on financial awards to address the shortcomings;
The revised policy to be accompanied by funding and costing model;
Implementation will be in a phased-in approach to ensure equitable and uniform funding & delivery of services;

35. Conclusion
The current situation in the country as articulated in the White Paper review report, point to the fact that Social welfare services are underfunded.
Treasury working with DSD to fast track the model of funding of welfare services including funding of NPOs
DSD is of the view that these initiatives will assist in bridging the funding gaps

36. Thank you!