NGO Regulation Network

South Africa

Regulation in South Africa occurs on three levels:

1. Firstly NGOs might be registered as voluntary associations (universitas. if incorporated), section 21 companies (Companies Registrar, DTI) or trusts (governed by District Master of the Court Office, under Dept for Justice).
2. These three types of organisations can then register as an NPO (Non-profit Organisation) with the NPO Directorate. Donors often require registration as an NPO as a condition of funding.
3. Finally organisations can choose to register as Public Benefit Organisations (PBO) with the Tax Exemption Unit, South African Revenue Service (SARS). Only when an NGO is registered as a PBO does it receive tax breaks. Registration as an NPO (stage 2) is not a legal requirement to register as a PBO (stage 3).

Legal Framework

NPOs are registered under the Non-Profit Organisations Act 71 of 1997

Public Benefit organisations can be registered under the Income Tax Act of 1996.

Voluntary Associations are a product of the common law.

Section 21 Companies are registered under the Companies Act 1973.

Trusts are registered under the Trust Property Control Act 1957.

There are currently plans underfoot for a new NPO law - draft proposals are with the NGO sector for comments, and a technical committee has been appointed to take this forward (March 09).

Regulatory Framework

The primary regulators are as follows:

• NPO Directorate, Department of Social Development
• Tax Exemption Unit, South African Revenue Service
• Companies Registrar, Department of Trade and Industry
• District Master of Court Office, Department for Justice

Reporting Requirements

The Non-Profit Organisations Act requires organisations registered with the NPO Directorate to submit annual accounts and narrative reports. Standard formats for the narrative reports are available through the Directorate’s website. Accounts have to be approved by an Accounting Officer regardless of the size of the organisation. These annual reports and accounts must be filed within nine months of the end of the financial year. Failure to do this will result in deregistration.

Section 21 Companies are required to submit accounts and reports to the Companies Registrar.

Public Benefit Organisations are required to submit accounts and reports to the revenue department for tax exemption purposes

Government - NGO policy

As far as we are aware, there is no specific Government policy to address its relation with NGOs. However the Impact Assessment of the NPO Act published in January 2005 by the Department of Social Development gives good assessment of the legal framework.

The NGO Sector

Accessing the database of NGOs:

The NPO Directorate currently has approximately 52,000 NGOs on its database which can be accessed online.

Self-regulation

SANGOCO (South African NGO Coalition) developed a Code of Ethics primarily to address issues of good governance.

There are additionally many umbrella bodies and capacity building organisations working regionally and thematically to represent their members and strengthen civil society. Such bodies include:

• The Non-Profit Consortium: Consortium of NGOs to improve the capacity of South African NGOs. It also focuses on non-profit legislation.
• SANGOnet: This was established by in 1987 to improve communication and information on NGOs working in South Africa.
• CAF Southern Africa: CAF Southern Africa is an independent non-profit organisation that promotes and facilitates effective social investment.

Independent Anlaysis of the Sector

GuideStar is developing a project in South Africa to map the NGO sector - Inkanyezi GuideStar (site currently under development).

"South Africa" in Global Civil Society, Dimensions of the Nonprofit Sector, Vol. II (2004) Centre for Civil Society Studies, Johns Hopkins University