The global financial crisis: experiences of and implications for community-based organizations providing health and social services in South Africa

Abstract

The global financial crisis that began in 2008 with the collapse of the US real estate bubble is considered the worst economic turmoil since the Great Depression in the 1930s. While the crisis has negatively impacted the global economy and the flow of aid to Sub-Saharan African countries, little is known about the implications of the crisis for community-based organizations (CBOs) providing health-related services in marginalized communities. We conducted qualitative interviews with managers of 14 CBOs providing health and social services to marginalized communities in South Africa about their experiences of the crisis. CBOs reported experiencing a marked decrease in funding received from both international and local donors as a result of the global financial crisis. At the same time, they experienced difficulties in securing new funding. Organizations addressed the funding problems by conducting organizational restructuring and implementing austerity measures that led to the retrenchment of staff, reduction in benefits and incentives for staff and volunteers, reduction in the number of communities served and rationing of services provided to these communities. These measures had negative psychological impacts on paid staff and volunteers and contributed to absenteeism and attrition among volunteers, and some of the organizations eventually closed down. Our findings show that the global financial crisis has far-reaching implications for health, social and developmental services delivery and ravaging impacts on the economy of marginalized communities. Policy-makers should explore mechanisms for protecting CBOs from the effects of economic shocks to guarantee the provision of critical services to marginalized communities.

Keywords:

• community-based organization
• community health worker
• global financial crisis
• marginalized communities
• primary health care
• service delivery
• South Africa

Acknowledgements

The authors would like to thank the management and staff of all the community-based organizations that participated in the study. A different version of this paper was presented at the 20th International Association for Feminist Economics Conference, Hangzhou, China (24 June 2011). We would like to thank the participants at the conference for their feedback and suggestions. We also want to express our sincere appreciation to the Department of Clinical Epidemiology and Biostatistics and the Centre for Health Economics and Policy Analysis at McMaster University, Hamilton, Canada for hosting Olagoke Akintola during the time we were preparing the earlier versions of the manuscript.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the National Research Foundation (NRF) of South Africa [grant number 71101] and the National Research Foundation Incentive Funding for Rated Researchers [grant number 90879]. Netsai Bianca Gwelo’s participation in this study was supported by a National Research Foundation funding for postgraduate students linked to OA's NRF [grant number 71101].