The business of welfare: NPOs report losses of R35M in last three years

The Covid-19 pandemic has widened the welfare gap and forced NPOs to make tough decision says USB's Dr. Armand Bam.

The Covid-19 pandemic has exacerbated the growing and unsustainable “welfare gap”, forcing many non-profit organisations (NPOs) to make tough business decisions.

"Survival over service" is how Dr. Armand Bam, head of social impact at the University of Stellenbosch Business School puts it in his recent article 'The business of welfare is everyone's business'.

He says over the last decade, welfare organisations have reported massive losses, close to R220 million.

No business expects to survive running losses like that, but we place the expectation on NPOs to still maintain their functioning.

Dr Armand Bam, Head of Social Impact - University of Stellenbosch Business School

Bam says the plight of NPOs has been highlighted with the closure of three welfare homes for the elderly by Cape Peninsula Organisation for the Aged (CPOA), an announcement which was met with widespread outrage from the community.

The CPOA runs quite a profitable business on the one side in terms of the retirement villages in affluent areas...

Dr Armand Bam, Head of Social Impact - University of Stellenbosch Business School

And the closures that have taken place in the more disadvantaged areas.

Dr Armand Bam, Head of Social Impact - University of Stellenbosch Business School

Listen to the full conversation below:

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