Investment in Hope 2020

Dear Tribe Member
01 February 2016


Thank you for being part of Ethembeni’s tribe of hope. Together, for the past 15 years Ethembeni has helped thousands of families move from vulnerability to wholeness. Your actions announce that God cares and that we can trust Him for our daily needs. Thank you.

In 2016, we are exploring new channels of income so that we can sustain our growing services for the next 15 years. At present, we need R450 000 per month to sustain care, development and prevention services to over 700 families. Up till now, every rand, dollar and euro donated is used for running costs. We believe the time is right to change this operational approach as investing in the future will bring new channels of income which could sustain the tribe of hope.

After consulting board members, financial advisors, other NGO leaders and my wise father Barry, we’re now investing in a unit trust account with Northstar Asset Management Company administered by Allan Grey. We have chosen unit trusts as our investment product because we can invest varying amounts over time and spread our risks over the various assets classes. Ethembeni’s risk investment profile is conservative yet unit trusts still allow us significant equity returns in the long-term. We’re trusting Northstar Asset Management Company as their investment track record fits our risk profile.

The investment goal is to have R5m in unit trusts by 2020 – 5 short years. Taking a medium risk approach we are hopeful that these unit trusts could generate a yearly income stream of R400 000 at 8% p.a. This investment income would be used for core operational costs making Ethembeni’s core services sustainable into the future. Our core services are caring for vulnerable families affected by HIV.

We are inviting you to consider contributing towards our shared Investment in Hope. Ethembeni has been contributing R3 000 every month from February 2015 from income we generate ourselves. We aim to reach our goal of R5m through faithful monthly contributions, bequests and once-off donor contributions.

In the following text you will find more information around Ethembeni’s Sustainability Policy.

Yours in faith

Grant & Zwelihle 



1.1.     Ethembeni’s financial sustainability is embedded in the trust and faith in, and dependence upon, God as the provider of all resources. The stewardship of all resources on the part of the Board of Directors, management and staff is ensured by constantly seeking His will in all our decisions and conduct. We trust that we will keep in line with His plans.

1.2.     Ethembeni makes God’s love our aim (1 Corinthians 14:1). Fundraising is a ministry where the gospel is proclaimed inviting people to share in our vision and mission with Jesus.

1.3.     To ensure sustainability, it is necessary that there be a steady flow of proposals submitted to new and existing donors. It is the responsibility of the Ministry Director to ensure that proposals are submitted on a regular basis.

1.4.     Transparency with and comprehensive reporting to each individual donor is an essential ingredient in maintaining their support; as are the budgeting and fundraising systems developed by Ethembeni. Person-to-person communication by ‘phone, e-mail and, wherever possible, face-to-face, is an essential ingredient in building donor confidence. We value highly relationships with people.


Since the launch of Ethembeni in November 2000, Ethembeni has witnessed dramatic and far reaching changes pertaining to HIV, AIDS and TB activities. The following trends are based on Ethembeni’s actual experiences in both the local and foreign sectors for over 15 years. Their combined effect on Ethembeni highlights the need for an additional and alternative approach to securing much needed funds for ministry activities. Some of these trends are:

2.1      HIV, AIDS and TB is a government problem

The perception exists that the SA government is largely responsible for solving the HIV pandemic. Ethembeni aligns itself with government policies and aims to add significant value to the quality of services provided. The burden of caring for over 6.4 million citizens who are HIV positive and the reduction of new infections of 469 000 each year needs to be shared with government, business and civil society.

2.2      HIV funding fatigue

We have seen many donors stop funding HIV organisations since 2007 as they have become tired of statistics that seem to indicate little impact for money invested.

2.3      HIV is unattractive

South African Corporates are spending increasingly more on education projects and less on health issues like HIV. HIV has many negative stereotypes and stigma attached to it because it is largely transmitted through sexual contact.

2.4      Withdrawal of overseas funding due to changed perceptions of South Africa

Since the 2010 Soccer World Cup in South Africa, governments like the USA and Netherlands have perceived SA to have enough finance to address our own problems. These governments have decreased support for the NGO sector and no replacements have been found. The USA government grant of R2m annually to Ethembeni will be stopping in September 2016 making us extremely vulnerable.

2.5      Some donors exclude essential cost elements

Funds have been received from certain funders towards specific projects but excluding certain cost centres for example salaries, limited administration, and so forth. It is restricted funding that can only be used for specific project or programme costs. These funders expect Ethembeni to raise funds for these costs from other channels.

2.6      Delays in receiving responses from funders

It is no longer an exception for a funder to delay the response to an application for funds, resulting in cash flow problems for Ethembeni. The funder either does not approve the timeously submitted request until three to six months into the financial year or, having approved the request, the funder takes a few months to process the funds.

2.7      Funders are unwilling to contribute towards the financial sustainability of NGOs

Ironically, although funders want Ethembeni to be sustainable, they are unwilling to contribute towards financial sustainability. 


The combined effect of these funding trends constitutes a “threat” to Ethembeni’s future and underscores the fact that Ethembeni is responsible to ensure its own survival and growth rather than depend on funders. Ethembeni is committed to the establishment of a Financial Sustainability Plan which will be approved by the Board of Directors. (Goal is July 2016 for approval and implementation.)


The purpose of this plan is to provide internal financial resources to ensure continuity of Ethembeni’s ministry, particularly since Ethembeni works with vulnerable families which require a long-term approach to enable them to become whole. The intention is to reduce our financial vulnerability on funders especially in relation to reserves and unrestricted income.

Specific objectives have been set to develop the Investment of Hope sustainability fund (reserves) to generate returns that will eventually cover the vital but unpopular cost elements (as far as funders are concerned) through interest earned. The objectives are:

  • General costs to cover the cost of firstly, administrative overheads, secondly, strategic management services, and thirdly, provide 3-6 months of cash flow in the event of funding and / or payment delays. We estimate that, to cover 50% of Ethembeni’s operating costs and assist with payment delays, reserves of R1.5m will be required.

Additional reserves being explored to cover specific costs:

  • Vehicle replacement costs which involves the setting aside of income based on appropriate cents per kilometre travelled. We estimate that R 700 000 is needed for R 50 000 per annum to be generated for the purpose of maintaining a healthy fleet of vehicles needed to cover the large distances we travel each year. This also has the potential to begin addressing certain running costs of vehicles depending on investment returns.
  • Building project to eventually enable Ethembeni to establish a training and administrative centre in Howick in KwaZulu-Natal. We estimate that R3 million is needed for this objective.
  • Equipment (especially computers) replacement cost which is budgeted for each year at an appropriate cost. We estimate that R250 000 is needed for R25 000 per annum to be generated and eventually enable Ethembeni to replace essential equipment
  • Vehicle insurance cost which is also budgeted for each year to enable Ethembeni to self-insure the bulk of its vehicle fleet. When we reach R2m in total in the Investment of Hope fund, we could begin self-insurance by depositing our monthly premiums into our own dedicated vehicle insurance fund.

A further benefit of this sustainability fund approach is that it will eventually release more time for appropriate management of the development process. Very often, too much time is spent on raising funds and addressing financial crises which stem largely from the various funding trends described above. This means that the fund itself must be “management friendly” in terms of Ethembeni’s input.


Ethembeni aims to invest the following sources of unrestricted income:

  • Individual donations where the donor believes in our sustainability plan
  • Reinvestment of dividends and interest received from the Investment of Hope fund.
  • Any bequests received.
  • A set proportion of income derived from example VAT returns
  • Specific income from fundraising activities, for example the Employee Wellness Services offered by Ethembeni at R500 per person to businesses and organisations.

The overriding moral principle applied to the investment of any monies is that we shall not invest in shares or unit trusts which derive a significant proportion of their income from tobacco, alcohol, gambling or arms trade.


Strict financial controls will be applied to this fund to ensure that its objectives can be achieved. The fund will be an integral part of Ethembeni’s annual auditing process. The intention is that actual use of the money will be delayed for as long as possible, thereby giving maximum opportunity for the fund to grow to at least R5 million by 2020. If Ethembeni were to close, there is a clause in our Constitution that ensures that any funds will be transferred to an organisation with similar values, vision and mission to those of Ethembeni.

The Ethembeni Board of Directors must approve and minute full discussions and decisions around any withdrawals from the Investment of Hope fund. Every year in October, an external investment advisor linked to Northstar Asset Management Company will be requested to present, at a board meeting, written reports on the unit trust investment performance.

Process of discernment:

First draft of policy: Grant Edkins

(influenced by Gerald Dedekind from ACAT).

Second draft after consultation with Zwelihle Sokhela, Richard van Eek, Hannes Mentz, Gordon Turner.

Final draft and approval: Full board meeting August 2015.

To be updated in April 2016.