During February 2024, the Management Board of Loeriehof was presented with an operational budget projecting a deficit of nearly R1 million. While most board members accepted the shortfall—seeing it as neither the first nor likely the last—the implications were severe. Another withdrawal from reserve funds would be required, this time approximately R450,000, leaving just R130,000 in the investment account.
How did we get here? A combination of factors contributed: a history of using reserves for operational expenses without reinvestment; the three-year COVID-19 lockdown, which devastated fundraising efforts and morale; restrictions on new admissions; and the loss of experienced board members. Oversubscribed subsidised beds were not addressed, and board focus shifted away from strategy toward operations. Exhausted staff and shrinking resources raised real concerns that Loeriehof might not survive another year.
Refusing to accept this outcome, Loeriehof reached out for help. We turned to Knysna Kerk and the Manager of Social Services for Badisa South Cape. Together, we identified our most urgent needs. Knysna Kerk hosted an information evening that brought in skilled volunteers who joined financial and staff committees, supported residents with activities, and brought renewed energy and insights into the organisation.
Key board positions, including Chairperson and Financial Committee representative, were filled with new expertise. Loeriehof began collaborating with other Badisa sites to share best practices and waiting lists. Loyal supporters offered invaluable advice and assistance, and we kept our focus on prayer, humility, and purpose.
Internally, difficult decisions were made. No staff bonuses were paid in 2023. Operational costs were cut to a minimum, and only essential maintenance was carried out. Empty rooms—averaging 8 to 10 per month—represented our greatest loss of income. Targeted marketing campaigns, including print media and word-of-mouth efforts, were launched.
By the end of 2024, the number of empty rooms had dropped to just three. All were filled at unit cost. Salaries were adjusted for inflation, and the minimum wage was maintained. A major maintenance project was fully sponsored by donors, and staff received a 70% bonus. The year ended with a healthy cash buffer.
Looking ahead, we continue working on waiting lists, growing our social media and fundraising reach, and plan to resume investment contributions by the end of the 2025 financial year.
The lessons we’ve learned are clear:
- Never use reserve funds for operational expenses.
- NGOs depend on skilled, committed volunteers, and keep looking until you find them.
- Focus on your core purpose: for Loeriehof, this is the care of older persons.
- Above all, stay humble. No organisation is immune to crisis.
