Shauket Fakie concludes his three-year term of office as National Chairperson of the South African National Zakah Fund (Sanzaf) with some profound reflections on the past financial year.
Income fell by 17 per cent (R133m from R160m in 2017) due to an adverse economic climate, a competitive environment and the support by donors of international humanitarian crises generally.
Despite these adverse conditions the charity has achieved a feat in distribution that fundamentally foregrounds the significance of this aspect of their operations. Income is a variable subject to market forces beyond the control of the charity. However, distribution is a function of operations directly under their control. Therefore scrutiny of the management and distribution of collected funds by a charity is a far more meaningful indicator of its efficacy than scrutiny of its income.
So Fakie elaborates on the positive impact of the achievement of 98,2 per cent of funds distributed (R131 million) in the past financial year, compared to 91,5 per cent in 2017. The intervention of Sanzaf’s projects, says Fakie, benefits 100 000 people every month.
The aggregation of Sanzaf’s flagship projects is referred to as its Education, Empowerment and Development (SEED) Programme. An amount of R27 million was distributed through this programme in the form of bursaries, early childhood development initiatives and projects like honey harvesting, chef and hospitality training and small-scale farming.
The difference this makes on the lives of people is typically quantified by the corresponding expenditure reflected in their financials. But the actual difference is unquantifiable. Qualitative impact has no empirical measure. After over four decades of investment and building the reputation as a leading distributor of Zakah, the organisation can legitimately argue that indicators of its success and impact are not necessarily evident in income targets.
Ultimately, what matters more to donors and beneficiaries is the delivery on funds distributed. This means building of reserves is a lesser priority. Indeed, says Fakie, the aim is to distribute more than 100 per cent in the forthcoming financial year.
Administration costs, expressed as a percentage of income this year is 16 per cent compared to 15 per cent in the year prior. This is due to the decline in income. However, the organisation has remained below the Shari’ah prescribed threshold of drawings from the Amiloon Fund of 12,5 per cent in order to sustain administration costs. And there are plans in place to trim these costs further by introducing greater efficiencies in administration.
Although Sanzaf does not have projects dedicated to international humanitarian crises, it does have partnerships with other charities that do support international projects. This is applicable when Sanzaf donors specifically request that their funds be used to support such projects. In such cases Sanzaf partners with Al Imdaad in order to channel donor funding to the desired international project.
Fakie says about eighteen months ago Sanzaf was approached by Penny Appeal, an international charity and a new entrant in the South African charity landscape, with proposals of collaborative relief projects in Africa. Fakie says there were high level engagements with Penny Appeal and that Sanzaf has opted to remain focused on its current priorities and to preserve its independence.
He added that the impact of Penny Appeal in South Africa is sustained by all charities and that the greater diversity of charities is should ultimately benefit the recipients.
Fakie reflects on the greatest challenges of the past year and refers to the loss of key human resources in Gauteng, addressing governance needs and implementing the priorities of their Vision 2020 Road Map in becoming financially self-sufficient.
Of course, another challenge was the ‘Cape Accord saga’ which is technically a post-balance sheet event. The organisation was initially a signatory of the accord and latter withdrew its support due to pressure from, inter alia, its donor community. However, Sanzaf has gained valuable experience and responded with both public and internal strategies in order to mitigate possible adverse consequences in future.
In the long term Fakie says charities will have to innovate and make greater use of technology in order to remain sustainable. And they have to remain accountable and demonstrate the impact they have on society.
Fakie expressed gratitude to those who supported him and wished his successor well when this appointment is made next month.