JOHANNESBURG—June 21, 2024— NGOs in Africa that have grown significantly rely overwhelmingly on international sources, yet only a small share of international funding is directed to these organisations, according to a new study from The Bridgespan Group. The research also found that, despite operating in an environment of funding scarcity and uncertainty, many of these NGOs are growing, innovating, are deeply involved in their communities, and are delivering powerful impact on the continent.

The study analyses how African NGOs grow, their revenue strategies, and how they acquire the funding required to grow and sustain themselves. The international funding sources they rely on include philanthropy from outside Africa (foundations or high-net-worth individuals) and bilateral (foreign government) and multilateral (e.g., World Bank) donors.

In researching the study, Bridgespan analysed revenue data for 85 NGOs in Kenya, Nigeria, and South Africa with budgets of over $1 million and interviewed leaders of 33 large NGOs in those countries—including Lwala Community Alliance, BudgIT, LEAP Africa, Harambee and Desmond Tutu Health Foundation. Bridgespan defines African NGOs as those with an Africa-based decision-making “locus of power,” factoring in the headquarters location, the composition of the organisation’s leadership team and board of directors, decision-making structures and norms, and the focus of the work on the ground.

“We focussed on South Africa, Nigeria, and Kenya because they are the largest economies in sub-Saharan Africa and have the largest and most mature social sectors on the continent,” said Niloufer Memon, a Bridgespan partner and co-author of the report. “Ninety percent of the organisations we interviewed across the three countries received their first pivotal grant—a significant early milestone in their journey—from a non-African funder.”

Bridgespan’s research surfaced five key findings:

• International funding fuels the growth of African NGOs. Nine times more official development assistance (ODA) flowed into the three countries than international philanthropy in 2022, underscoring the importance of international philanthropic funding.
• NGOs have adopted tactics specific to accessing international funding, like hiring and building teams that reflect the skillsets needed, establishing a US or UK registration to facilitate fundraising, and building sufficient credibility with funders to move from being a subgrantee to a direct grantee.
• Domestic funding helps NGOs in South Africa much more than in Kenya and Nigeria. It was the largest revenue source for only two of the 33 NGOs—both South African. For some, domestic funding helps support work or build organisational capacity that international funders won’t pay for.
• Flexible funding is relatively scarce but can be catalytic. Flexible funding, even if it made up only a small portion of the organisation’s total revenue, has allowed NGOs to develop their capacity and strengthen their resilience in ways that are hard to do with restricted funding tied to a specific set of activities or goals.
• African NGOs often seek to broaden their funding sources to sustain their growth. Amidst the overall scarcity of funding and the risk of shifting funder priorities, most of the NGOs interviewed do not want to become too dependent on a single category of funding and have devoted efforts to broadening or shifting their revenue mix.

“The strength of the 33 NGOs we interviewed underscores that there is an enormous opportunity for funders who want to make a difference in Africa,” said Nkanyiso Hlongwa, co-author of the report and a Bridgespan partner. “There remains much to do to break down the historical barriers that hold African NGOs back from reaching their full potential. And with their distinct role in the African civil society ecosystem and their proximity to the communities they serve, that potential is enormous.”

Read the full study at: https://www.bridgespan.org/insights/how-african-ngos-grow

About The Bridgespan Group

The Bridgespan Group (www.bridgespan.org) is a global nonprofit that collaborates with social change organisations, philanthropists, and impact investors to make the world more equitable and just. Bridgespan’s services include strategy consulting and advising, sourcing and diligence, and leadership team support. We take what we learn from this work and build on it with original research, identifying best practices and innovative ideas to share with the social sector. We work from locations in Boston, Johannesburg, Mumbai, New York, San Francisco, Singapore, and Washington, DC.