There are thousands of charity and community care organizations in South Africa which rely on donor funding – whether from the National Lotteries Board, or from international donor organizations and institutions, or from private benefactors.
The Fund Raising Act 1978 regulates the collecting of funding, and where the Non Profit Organisations Act 19971 comes into the picture is to provide the administrative and regulatory framework for the registration of non-profit organisations. Basically, to collect money from public sources, you have to be registered as an NPO.
In terms of the Act, a ‘non-profit organisation’ means2 a trust, company, or other association of persons:
- established for a public purpose; and
- the income and property of which are not distributable to its members or office bearers (except as reasonable compensation for services rendered).
The Act is administered by the Minister of Social Development.
- When a non profit organisation is being wound up or dissolved, its remaining assets (in other words, after all liabilities have been met) must be transferred to another Non-profit Organisation having similar objectives.3 It is a contravention of the Act if this does not happen.4
It is also an offence for a person, body or organisation to represent themselves as being any validly registered in terms of the Act if they are not so registered.5
It is an offence for any person, body or organisation to make use of a registration number, a registration certificate, or any information contained in the registration certificate if they have not been registered in terms of the Act.6
- It is an offence for any person, body or organisation to make false representations in any document or narrative submitted to the Director of Non-profit Organisations.7