COMMUNITY AGENCY FOR SOCIAL ENQUIRY 

Organizational Vision

The Community Agency for Social Enquiry (CASE) is a South African NGO specializing in large-scale research projects. It fills an important niche in the research market by providing low-cost, high quality statistical research and policy analysis to NGOs, community-based organizations, international agencies, government, and private sector clients. In 1990, CASE's donors indicated that funds given to South African NGOs for research activities would be declining because of political changes in South Africa and in Eastern Europe. To beat this challenge, Executive Director David Everatt set a goal to become self-reliant. Partly, he says, because he wanted to prove CASE should be "paid for doing a good job rather than being given a handout." He was convinced that CASE could provide a top-quality service at a competitive price, and in doing so, make the organization financially self-reliant.

Citizen Base Strategy

Set financial targets for self-reliance

CASE had always generated some earned income, but now it set out to dramatically increase this amount as a percentage of total income. The goals was to become financially sustainable within three years. CASE developed a definition of financial sustainability which had two phases:

• Setting and reaching the goal of being 100% self-funded.
• Building a reserve fund to help cover future expenses and provide a hedge against inflation.

Case made quick progress towards reaching these financial goals. Average earned income as a percentage of total income for recent financial years was 25% - 1993/4; 50% - 1995/6; 100% - 1998/8. CASE was able to achieve such sharp increases in earned income so quickly primarily by putting its own fieldwork unit in place to generate and 'keep' profits in house. This required doubling and then tripling its staff size to be able to meet client demand. But even with the increased expenses that decision required, income generated continued to exceed the organization's expenses by a big enough margin to keep it from incurring debt.

Change nature of relationship with donors

Another important change was that CASE accelerated a shift in the nature of its relationship with donors. It moved away from being a recipient of grants and moved towards being a contracted provider of services. Donor agencies increasingly contracted CASE to do specific studies and surveys which made the relationship more like a client/customer or partnership relationship than a grantor/grantee relationship. One important implication of this shift was that CASE was not restricted by donors' prescriptions about what it could and could not do to make itself financially sustainable.

Create a capital reserve fund with specific purposes

Case has built up reserves from earned income of approximately R2-million. Reserves are kept in a 33-day call account. The purposes of the reserve fund are:

• To have three months' worth of salaries in the bank at all times for retrenchment packages if these become necessary;
• To make allowances for subsidies to groups that cannot afford full rates;
• To ease cash flow difficulties (especially when payment for completed government contracts is slow). CASE is concerned about not allowing cash flow needs to become too big a drain on reserves and monitors this closely.

Results

Interestingly enough, having proved that it was capable of being 100% self reliant, CASE has now decided to solicit donor funds once again. The decision was motivated by CASE's desire to strike a better balance between donor funding and self-financing into the future. There are several factors which have influenced this decision:

• Being entirely client-driven in its work gave CASE little scope for doing more fundamental or core research on issues identified by staff as being important.
• The need to further develop CASE as an organization meant that covering costs and any surpluses were being used to subsidize low-income clients. Thus there was insufficient surplus to cover training and organizational development needs.
• CASE needs to maintain some links with donors for the benefit of its low-income clients. When a client needs funds to pay for research and CASE is not able to provide sufficient subsidy, CASE may help connect the clients to donors who are able to provide the necessary funds.
• The public image of CASE has been effected by its increased self-reliance – the perceptions of some people about what CASE is and where its priorities lie have changed.

However, sustainability of the organization will be based on the following:

• Case will continue to strike a balance between donor funding and self-reliance.
• Case will never go back to being 100% dependent on donor funds.
• It will keep monitoring the environment to keep informed about how long donor funds will be available, and plan accordingly.
• It will use donor funds strategically, in part to increase its capability to be more self-reliance.

Perhaps the most important thing that will help CASE survive into the future is the knowledge and understanding it has gained about what makes an organization sustainable. It has learned that sustainability for NGOs is a much broader issue than just money.

This case was prepared by Lisa M. Cannon for "Life Beyond Aid: Twenty Strategies to Help Make NGOs Sustainable" – a publication of the Initiative for Participatory Development and INTERFUND.