How corporates and crowdfunding help the student funding crisis
Crowdfunding is a simple concept of sharing and promoting funding needs to various networks, communities and social media platforms
The lack of funding for tertiary-level education remains a critical issue in SA. While the National Student Financial Aid Scheme (NSFAS) provides access to higher education for students from poor and working-class families that would not otherwise be able to afford university fees, students who fall into the “missing middle” bracket still find it challenging to secure funds.
SA’s unemployment rate is two times higher than its closest Brics counterpart, currently sitting at about 29%.
Youth face an even greater crisis, with one in three unemployed and inadequately equipped to enter the marketplace. This equates to more than half a million youth who require funding to pursue tertiary education to gain the skills necessary to obtain employment. SA’s “missing middle” constitutes 40% of these youth, who have been left with no access to the R111.2bn allocated by government for free education, as they do not meet the criteria to qualify.
One of the main challenges ... is identifying and vetting students within their sector, and managing the administration of the funding and support payments
Access to education should not be dependent on wealth. The tertiary education funding crisis that resulted in the #FeesMustFall movement highlighted the importance of education in the lives of South Africans, and the barriers that prevent access to it. It led to the birth of the Feenix crowdfunding platform, which has helped raised millions for students since it started.
Crowdfunding is a simple concept of sharing and promoting funding needs to various networks, communities and social media platforms, where donors are able to support, in this case, students according to their financial means. The funding pool is made up of a mix of private and corporate donors. I believe that the new Broad-Based BEE (B-BBEE) Codes due to come into effect soon, will make it even easier for corporates to support funding for tertiary education.
Why — and how — businesses should participate
Amendments to the department of trade and industry’s B-BBEE Codes of Good Practice are set to help resolve the issue of access to education in SA. Published in May 2019, the amendments will come into effect in December this year with a requirement that 2.5% of a corporation’s annual payroll is spent on funding higher education.
The amendments to the B-BBEE scorecard are a positive step towards addressing the challenge that many face in the country — access to higher education.
The amendments to the B-BBEE scorecard, in relation to skills development, have a specific focus on supporting higher education students. This will encourage companies to provide funding for previously disadvantaged students for which they will earn up to four points on the scorecard.
The amendments include a revised code 300 for the skills development generic scorecard, and indicators for employed and unemployed learnerships are now said to be combined.
The previous target of 6% of the leviable amount for generic enterprises has been split as follows:
- 3.5% (six points) to be spent on learning programmes. The implementation for this target will be the same as for the 6% target prior to the amendments to the codes.
- 2.5% (four points) to be spent on the new indicator for skills development, that is, expenditure for previously disadvantaged students at basic and higher education institutions.
There is a very specific emphasis on providing bursaries and support for basic and higher education students. The 2.5% target is a significant part of the skills development scorecard and corporates will need to focus on this to maintain their required B-BBEE levels. It would be beneficial for corporates to, instead, concentrate on their core business and work with other organisations, such as those that crowdfund, to ensure the effective allocation of monies.
One of the main challenges businesses who choose to contribute to bursaries face, is identifying and vetting students within their sector, and managing the administration of the funding and support payments. The compliance needed to claim this spend for B-BBEE purposes is very specific and it can be challenging to obtain the documentation required from each student.
The process is likely to require a large amount of paperwork and communication across various channels. This is where other organisations step in, whose platform specifically connects funders with university students. The added bonus is that such organisations have a database that gives them access to graduating students and those in search of internship programmes.
The amendments will make a major contribution to higher education in SA. The long-term benefit of this is that we’ll have an educated nation that is able to make informed decisions and that will be able to actively participate in the economy.·
• De Beer is COO of Feenix.org.