1 Introduction
This chapter puts forward some broad conceptual issues about the question of funding and resources for the National Youth Service. It looks at the current context in terms of resources which could be available from within government, the private sector, non-governmental organisations and international donors. It then briefly outlines the experience of national youth service programmes in other countries. Finally, it recommends principles and strategies to guide the resourcing of the National Youth Service. The recommendations in this chapter relate closely to the recommendations made on programmes and incentives in Chapter Three and institutional arrangements in Chapter Four.

The South African government presently has five priorities in terms of the national budget: meeting basic needs, investment in infrastructure, developing human resources, sustained economic growth and job creation, and ensuring safety and security. The principles and programmes of the National Youth Service proposed in this document have been developed in a manner which is consistent with these priorities. In fact the conceptual framework for the National Youth Service locates national youth service squarely within the ambit of the key development priorities identified by government. The funding of national youth service programmes will therefore be accorded the same priority as the funding of the five national development priorities cited above.

A detailed costing of the National Youth Service has not been carried out. A thorough research process is required to cost the programme conception contained in this Green Paper during the pilot phase.

2 Current context

2.1 Summary of government expenditure on community service
The development programmes launched by different government departments which directly or indirectly target young people are detailed in Section Two. Some financial information was made available during the research process, but it is not complete and is provided primarily as an indication of the level of funding and programmes which could be accessed by the National Youth Service.

The government programmes of the most interest in terms of the National Youth Service, and with the highest level of funding, are the labour-intensive infrastructure programmes in the Department of Public Works, the Department of Constitutional Development and the Department of Water Affairs and Forestry. Capital expenditure financed by national and provincial government is projected to increase from a total of R14.4 million in 1998/99 to a total of R 16.3 million in 2000/01. Most of these funds, however, are to be spent on capital-intensive, rather than labour-intensive programmes (land and buildings for public works, water schemes and related infrastructure, transport projects).

The largest labour-intensive programme is the Municipal Infrastructure Programme which will rise from an expenditure of R583 million in 1998/99 to R990 million in 2000/01. Smaller programmes are the Community-Based Public Works Programme and the Working for Water Programme, operating at a level of R100B300 million per year, with some additional funds from the Reconstruction and Development Programme and the Poverty Relief Fund.

The social service government departments like education, health and welfare, do not have youth service programmes per se, but are important in terms of the youth service opportunities which they could provide. Together, these departments account for 42% of government expenditure, but as is mentioned above, the flexibility to reallocate resources within each is limited.

The only major service programme funded by government has been the Service Corps of the South African National Defence Force. This programme was restricted, however, to demobilised non-Statutory Force members, and will be limited to rationalised Defence Force members in the future. The total cost of this programme is estimated at R70B90 million, but it did not, for a range of reasons, fulfil its original intent of involving the Service Corps in community service activities.

At the same time, government is constrained in terms of generating additional resources by its macroeconomic policies and in terms of redistributing resources among and within departments. For this reason, a range of strategies will be required to lever the required funding for the National Youth Service from various sectors in government and from other sources.

2.2 Government funds available to development agencies
A recent report on poverty and inequality in South Africa indicates that the number of non-governmental and voluntary organisations participating in development in the country is uncertain. However, the South African NGO Coalition claims that the number is between 17 000 and 30 000. Government is reported to subsidise over 2 000 welfare-related posts in the non-governmental sector.

To ensure that the needs of many service-providing non-governmental and community-based organisations are not neglected, government has been involved in establishing a permanent arrangement for the funding of these agencies. A National Development Agency is envisaged by government and Nedlac as the appropriate vehicle for the coordination of funding to non-governmental and community-based organisations, for which the Transitional National Development Trust was conceived as a testing ground. There are, however, concerns that if the National Development Agency process is not fast-tracked, the country runs a risk of suffocating those non-governmental organisations active in, among other areas, issues relating to young people in South Africa.

Section Two of this Green Paper has identified the roles which non-governmental organisations and community-based organisations will play in the design and implementation of the National Youth Service. This suggests that the National Development Agency will be crucial to the ability of the National Youth Service to harness the capacity of these and other organisations.

2.3 Private sector funding
Private sector organisations support development initiatives through corporate social investment grant making and through specific initiatives such as that which launched the Joint Education Trust in 1992. The most recent example of the latter is the announcement by the National Business Initiative of a R1 billion initiative for education and training in the tourism industry and for the upgrading of the quality of education in schools, among other purposes.

2.4 Non-governmental funding for youth-in-service programmes
Research conducted into non-governmental organisations and universities suggests that annual budgets for youth-in-service programmes ranged from R100 000 to R2 million. Foreign donors were the largest contributors of funds, followed by national businesses. The amount of funding available through non-governmental organisations is therefore very limited, and their scale of operation tends to be small. In focus group discussions, non-governmental organisations indicated that if they were to significantly expand their operations, they would have to design completely new strategies and modes of delivery.

2.5 International donors
A wide range of international foundations, trusts, foreign embassies and intergovernmental bodies, such as the United Nations agencies, are active in South Africa and will be approached for support of the National Youth Service. However, a great deal of foreign funding is now made available to South Africa through bilateral agreements between governments, and this would determine in large measure how these funds are to be accessed.

3 International experience
International experience suggests that there are a number of ways in which national youth service programmes have been funded in other parts of the world: general funding by government or funding by a specific government department, limited financial contributions by universities, in-kind support from communities (such as housing and food), foreign aid, and a mix of public and private funding. In a number of cases more than one mechanism has operated simultaneously.

According to research undertaken in 1997 by the Joint Education Trust, an overview of international experience in this regard suggests the following:

• Most of the service programmes surveyed were financed by government B even those managed and administered by higher education institutions. However, government support for these programmes has been considerably influenced by changes in the economy with the result that in most cases, government support has been reduced over the years and in a number of cases (including Indonesia and Ghana), it has dried up altogether. In Israel the education department is almost entirely responsible for funding the programme. In Nigeria the programme is funded and sponsored by the federal government. Project implementation is highly dependent on this funding and on state and local cooperation in acquiring land and other resources.
• In Mexico, general funding was provided at a national level from 1978. Although many students were initially paid a minimum wage for their service, this was greatly reduced from 1980 following an economic crisis. Government departments and agencies still share in financial support of students, while communities sometimes provide housing and food. Universities also provide funds, sometimes supplemented by non-governmental funding. In Nepal the programme was funded by government through the university budget and supplemented by Unicef.
• The AmeriCorps programme is an exception to those described above in that the private, public and independent sectors all contribute to the implementation of programmes. In 1994B95, more than 600 businesses and foundation contributes over US$20 million in financial support directly to local AmeriCorps programmes. In addition, millions of dollars of in-kind contributions in the form of loaned personnel, training facilities, computer networks and supplies have integrated private sector partners into the daily activities of AmeriCorps programmes.

Some of the core issues which emerge from international experience are the following:

• How to fund national youth service in a way that is sustainable? In cases where government was the sole funder of national youth service, many countries found it difficult, if not impossible, to sustain continued levels of funding. Those who succeed in doing so have largely been the wealthier countries.
• How to fund the National Youth Service in ways which make it an integral part of government=s strategy to deliver services to underdeveloped communities and avoid the possibility of youth service programmes being marginalised?
• How to make the division between core costs for the running of the National Youth Service and programme costs for initiatives supported by the youth service so as to devise a differentiated funding strategy which supports all the components of the National Youth Service?
• How to ensure that the National Youth Service will operate in a cost-effective manner that adds value to national development objectives?

4 Principles for funding the National Youth Service
The following principles will inform the resourcing strategies of the National Youth Service:

• That the National Youth Service be seen as one of the instruments through which government is able to achieve its national objectives for reconstruction and development.
• That a distinction is made between core funding and programmatic funding for the National Youth Service.
• That three year funding in line with the Medium Term Expenditure Framework, is provided by government for the core costs of the National Youth Service in order to ensure that it is able to undertake its medium and long-term planning and coordination functions.
• That no new Fund be created for the programmes of the National Youth Service within the government budget, but that existing resources be accessed.
• That in seeking funds for programmes, the National Youth Service employ a mix of strategies outlined in the next section.

In terms of these principles, the following definitions apply:

• Core costs: the operating costs of the National Youth Service Agency, consultancies from organisations and individuals, research, marketing, and advocacy.
• Programme costs: recruitment of participants, staffing, and operating costs or the youth service programmes (including stipends, transport and any other incentives for participants, food and accommodation, insurance, equipment for service provision, education and training, etc.).

5 Strategies for programmatic funding
Strategies for resourcing programmes of the National Youth Service will incorporate the following components:

• Leveraging resources from existing line budgets and from funds such as the National Skills Fund through appropriate working and programmatic relationships with government departments.
• Stimulating institutional action to undertake community service programmes, especially in the higher and further education and training sectors, and encouraging funding policies which support such action.
• Devising a range of partnerships including:
  
  • Interdepartmental partnerships B with one or more government department through which new initiatives are launched in which the partners have joint goals, or through which the National Youth Service is able to add value to programmes which are already running.
  • Institutional partnerships B with higher education and further education and training institutions for the provision of education and training to support the National Youth Service objectives, or for the provision of community service opportunities as part of the curriculum.
  • Partnerships with local government B through which youth service can be integrated with municipal infrastructure development projects.
  • Public/private partnerships B where private sector organisations agree to provide funds to government initiatives.
  • Regional partnerships B for example in the SADC region, through which youth service programmes could be launched and jointly supported by the respective governments and international donors.
  • International partnerships B between countries seeking to support particular development initiatives and for which bilateral aid may become available.
• Joining forces with other government departments to influence policy initiatives from the point of view of national youth service.
• Stimulating community-based initiatives, possibly through small grants, which are then able to leverage contributions from local government or local business.

6 Differentiated funding strategies for the target groups
Funding strategies will be devised according to the target group and their institutional location. The four target groups differ from one another in a number of respects, but primarily in terms of their institutional location. Young people in higher education and further education and training institutions are involved in formal learning programmes in an institution. Young people who are in conflict with the law are possibly in correctional service institutions, about to enter such institutions, or appearing before court. Unemployed youth have no institutional location.

Programme planning for each target group would take account of the institutional location, and funding strategies would be devised accordingly. For example:

• For young people in higher education and training, funding for service activities that relate to the curriculum will be accommodated within the funding formulae for these institutions B in other words, programme funding from the Department of Education for these institutions will take into account the cost of the service activities.
• For young people in further education and training institutions which are also programme funded, the same would apply. For those in further education and training institutions which are not programme funded, ie. senior secondary schools, service objectives and the development of civic values will form part and parcel of learning goals and some of the programme costs of youth service will be supported by the schools= budget and the Department of Education=s contribution to teacher salaries. Private sector organisations at local level will also be approached to support additional costs such as transport or equipment.
• For young people who are unemployed, existing government programmes will be adapted or expanded according to the National Youth Service criteria and guidelines, in which case the funding will be drawn from existing budget sources. Education and training components will be accommodated under existing arrangements such as the National Skills Fund. Relevant funding agencies will be approached to support service provision by non-governmental and community-based organisations. Other sources of funding are also possible.
• For young people who are in conflict with the law, the funding arrangements will be similar to those for unemployed youth.

7 Summary

7.1 Principles
The following principles will inform the resourcing strategies of the National Youth Service:

• That the National Youth Service be seen as one of the instruments through which government is able to achieve its national objectives for reconstruction and development.
• That a distinction is made between core funding and programmatic funding for the National Youth Service.
• That three year funding in line with the Medium Term Expenditure Framework, is provided by government for the core costs of the National Youth Service in order to ensure that it is able to undertake its medium and long-term planning and coordination functions.
• That no new Fund be created for the programmes of the National Youth Service within the government budget, but that existing resources be accessed.
• That in seeking funds for programmes, the National Youth Service employ a mix of strategies outlined in the next section.

7.2 Strategies
Strategies for resourcing programmes of the National Youth Service will incorporate the following components: