It's time for SA to break free from foreign donor dependency

The decision by the Trump administration to cut USAid funding and restrict financial aid to South Africa has been widely criticised as yet another example of unilateralism and political coercion in international relations. While this move directly affects millions of people dependent on USAid money for their livelihood and creates immediate challenges for civil society and development sectors reliant on foreign funding, it also presents an important opportunity: to assert South Africa’s sovereignty and critically re-evaluate the overreliance of civil society on external donors. 

Foreign funding is never neutral. It often comes with conditions that align with the ideological and geopolitical priorities of donor governments and institutions. For example, the “global gag rule” imposed by the Trump administration as part of the Pepfar (President’s Emergency Plan for Aids Relief) programme has severely restricted organisations receiving US funding from providing or even discussing abortion services. This policy has had a devastating impact on reproductive health initiatives across the continent. 

Another example is the National Endowment for Democracy-funded World Democracy Movement, which held its World Assembly in South Africa last year. This conference, under the guise of promoting democracy, was exposed for advancing Western geopolitical interests, leading organisations such as the South African Federation of Trade Unions (Saftu) to call for civil society to withdraw from it. Additionally, the Tutu Legacy Trust, led by Mamphela Ramphele, made the principled decision to withdraw from the same conference, further highlighting the problematic nature of such foreign-funded initiatives. 

Recent research by the Institute for Journalism and Social Change (IJSC) underscores the growing influence of US conservative Christian right-wing organisations in Africa. Between 2019 and 2022 their funding increased by 50%, channelling resources towards undermining sexual and reproductive rights and promoting anti-LGBTQ+ policies in countries like Uganda. This demonstrates how foreign funding often serves as a vehicle for exporting reactionary agendas that contradict the principles of constitutional democracy and social justice. 

Rather than lament the loss of US funding, this moment should be seized to challenge South African civil society to break free from donor dependency and push both the government and private sector to take responsibility for funding democracy, social justice and community development. 

South Africa has an extensive yet fragmented system of public funds that, if properly harnessed, could serve as an alternative to foreign donor dependency and create real self-reliance. These include the National Skills Fund (NSF), 21 sector education and training authorities (Setas), the Jobs Fund, the Industrial Development Corporation, the Development Bank of Southern Africa), the Green Fund and various provincial development finance institutions.

More recently, the Social Employment Fund and the Gender-Based Violence and Femicide Response Fund have emerged as new mechanisms to support social justice efforts. Probably, there are many other public funds that the public is not aware of.

To demonstrate the volume of resources held by these public institutions, the NSF's revenue in the 2023/24 financial year was R5.664bn. In the same financial year, the largest Seta had revenue of R2.177bn. A mere 1% of the 2023/2024 NSF revenue (R56.64m) would make a huge difference to the funding crisis facing many civil society organisations and popular movements. In fact, between 1% and 5% of funds from the entire public funding system would surpass the funds received from foreign donors.

The important thing to underline when it comes to the NSF and the Setas is that their scope of funding skills development is broadly defined to include social justice, human rights and community development. For example, a community development worker qualification and training programme could be supported by the education, training & development practices Seta in ways that advance community mobilisation, public participation and active citizenship.

While this public funding pool is vast and extensive, it is fragmented and has not been harnessed to advance constitutional democracy, social justice and grassroots power and initiatives. Often these funds are not accessed and optimised by the social justice sector and communities of poor and working people in ways that advance the above constitutional values as well as broader social, gender, economic and ecological justice. In some cases, we have allowed these funds to be captured by corruption and mismanagement as we saw with the National Lottery.

Yet these public funds could play a key role to fund impactful and transformative work of the social justice sector and other community-driven initiatives. Further, these funds could also contribute to the long-term financial sustainability, skills base, capacity and sustainable development of the social justice and community sectors. Accessing these funds is in line with our constitutional values, social justice broadly and the deepening of democracy.

Despite the availability of these funds, they remain largely inaccessible to grassroots organisations and the broader social justice sector due to bureaucratic hurdles, lack of awareness and exclusionary funding models. There is an urgent need to: 

• Map and quantify existing public funding opportunities; 

• Develop a coherent framework for accessing and utilising these funds for social good; 

• Challenge government and private sector actors to prioritise funding for constitutional democracy and community-driven development; and

• Build interfaces between public funding institutions and independent funding institutions like the Hlanganisa Community Fund for Gender and Social Justice Oxfam South Africa, the Foundation for Human Rights, ActionAid SA, Act Ubumbano and the Social Change Assistance Trust. These funding institutions have both the required financial systems and capacity that would comply with the requirements of the public funding institutions. In addition, they have access and experience of funding, supporting and building the capacity of grassroots actors who on their own would never comply with regulatory and reporting requirements of Setas, the NSF and other public funding institutions. These independent funding institutions are well-positioned and a capacitated mechanism may be needed to hold such public funds and administer them for the broad social justice and community sectors in ways that can optimise programme quality, impact, skills development and economies of scale.

This potential to build long-term self-funding sustainability from domestic resources is not possible without strategic action from civil society.

Civil society must move beyond passive reliance on foreign donors and take proactive steps to secure domestic funding that aligns with our constitutional values and priorities. This starts with locating and mapping the scope in the public funding institution, quantifying this putative system and working out ways to harness this system into a sustainable relationship with the social justice and community sectors.

This means holding the government and public institutions accountable for mobilising and distributing resources effectively while pushing the private sector to invest in social justice not just as philanthropy but as a necessary investment in long-term societal stability. It also means strategic catalytic action to unlock resources held by public institutions in ways that support civil society action for promoting constitutional democracy, social justice and community development. This includes ensuring that there are no political or other strings attached in order to protect the autonomy and independence of civil society and popular movements.

We can set an example for the continent in how to sustainably fund constitutional democracy without being at the mercy of foreign interests. 

The Trump-era funding cuts are a wake-up call. The real question is: will we rise to the occasion and reclaim our financial independence for the social good, or will we continue to outsource our democracy to foreign donors? 

Jara is with the Zabalaza Pathways Institute. This article is co-published with the Amandla! magazine