Responsive strategies adopted by non-profit organisations in recessionary times to ensure their financial sustainability

Abstract

The impact of the global financial crisis, which has its origins in the United States, reverberated through the private sector and brought some country economies to their knees. This highlighted the interconnectedness of world economies. Big companies filed for bankruptcy whiles others were acquired in a bid to avoid total annihilation. Unemployment levels reached terrifying heights. While the world economy was unravelling and the legitimacy of governments was determined by their ability to alleviate the financial pressures their citizens were under; another group was feeling the pressure. However, the impact the financial crisis has had on group has not received nearly as much attention. Although the non-profit sector may not feature highly on the economic scales and matrices; it is part a part of the global economic fabric. It receives funds from governments, corporates, foundations, philanthropists and individual citizens. The size of the donations they receive correlates to the size of the disposable income of their donors. It therefore follows that when the world economy unravelled; non-profit organisations saw a marked decline in the funds received. This paper sets to establish not only how the South African non-profit sector responded to what became a funding crisis for them; but also to test their responsive strategies within the framework of the strategy process. An exploratory research method was used to investigate this problem, and the results showed on the one hand, a spirited sector that has taken the challenge on by adopting more commercial thinking to ensure their financial sustainability. On the other it was found that challenges with a key strategic partner prevailed as well as the challenge of accepting the incongruence of embracing commercial practices vis-à-vis holding deep social mission values.