nonprofit organisations directorate
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Nonprofit Organisations Directorate. Uganda, Kenya & Tanzania Delegations WELCOME 08 July 2008. Content. Introduction & Profile of sector The legal Framework Nonprofit Organisations Act Registration process Monitoring & Compliance Access to Information Capacity Building - PowerPoint PPT PresentationTRANSCRIPT
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Uganda, Kenya & Tanzania Delegations
WELCOME08 July 2008
Nonprofit Organisations Directorate
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Content• Introduction & Profile of sector• The legal Framework
– Nonprofit Organisations Act • Registration process• Monitoring & Compliance• Access to Information • Capacity Building
• Research Projects– Impact Assessment on the NPO Act
• Conclusion
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A Profile of South African NPO Sector
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Defining an Nonprofit OrganisationEncompasses trusts, companies and other associations that are
“established for public purpose” and that “the income and property of which are not distributable to its members or office-bearers except as reasonable compensation for services rendered” (sec 1 of the NPO Act)
………in other words,
• community based organisations (CBOs)
• Nongovernmental Organisations (NGOs)
• faith based organisations (FBOs)
• civil society organisations (CSOs)
all collectively known as NPOs.
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NPO Sector Profile: Size
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Total income R14 billionGovernment provides R5.8 billion (42%) R500 million from overseas development
assistanceSelf generation (fees, sales, membership dues)
29%Private sector donations (25%)
NPO Sector Profile: Income
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NPO Sector Profile: Location
87% based in communities8.7% provincially based4.5% national
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NPO Sector Profile: Financial
11% no financial resources 77% had revenues of less an R250 K 8% had revenues between R250 K -
R1m 4% revenue exceeding R1m
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Nonprofit Organisations Act
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The Purpose of the Act• The NPO Act was enacted in 1997, it aims to
(section 2)-(a) creating an enabling environment within which
NPOs can flourish.(b) establish an administrative and regulatory
framework within which NPOs can conduct their affairs.
(c) encourage NPOs to maintain adequate standards of governance, transparency and accountability and to improve those standards.
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Cont… Purpose
• Repeals the Fund- raising Act of 1978– Regulated and control the funding of
organisations- • Particularly to ones that were considered
potentially subversive to then apartheid regime.
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Cont… Background to the Act
• South African Civil Society were highly involved in drafting the current legislation.
– Culminated from the September 1996 conference on- “An enabling framework for civil society in Southern Africa.”
– There were also other different interactive mechanisms and forums with the sector.
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Cont…Background to the Act• The Legislation is rooted in the fundamental principles
of human rights culture as reflected our country’s constitution-
– Right of freedom of-• Expression and of association;• Religions, belief and opinion;
• The legislation serves mainly- – To provide a Registration Facility for organisations that are
nonprofit in orientation and are not organs of the state;• Enables an organisation to establish itself as body corporate.• Regulates how this entity operates and account broadly to its
community and the public.
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Sec 21 Companies (Companies Act of 1973)
Trusts (Trust Property Control
Act of 1988)
Voluntary Associations (Common Law)
Nonprofit Organisations Act 71 of 1997(All have to meet the same compliance requirements)
Public Benefit Organisations(Tax Exemption Status incl. skills development levies)
Regulatory Framework on NPOs
Large, sophisticated predominately urban based with conventional Organisational Development Systems. Mostly have all relevant skills & capacity
Traditionally informal organisations rooted in communities. Often lack capacity & access to resources
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Functions of Directorate• The Department has established a Directorate in terms
of section 4 of the Act. • Main functions of this Directorate is to (sec 5)-
a) Facilitate the process for developing and implementing policy;
b) Determining and implementing programs, incl programs-(i) To support nonprofit organisations in their endeavour to register; and (ii) To ensure that the standard of governance within nonprofit
organisations is maintained and improved.
c) Liaising with other organs of state and interested parties; andd) Facilitating the development and implementation of multi-
sectoral and multi-disciplinary programs
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Organogram of DirectorateDIRECTORATE: NONPROFIT ORGANISATIONS DIRECTORATE
PURPOSE: To encourage and support non profit organisations in their contribution to meet the diverse needs of the population needs of the country
FUNCTIONS: Develop Institutional Capacity Building Programmes.Administer an efficient registration facility.Database management and stakeholder liaison.
SUB-DIRECTORATE: NPO CAPACITY BUILDING
PURPOSE: To develop capacity building programme.
FUNCTIONS:Institutional capacity strengthening.Improvement standards of governance.Benchmark good practices.Assist provinces and local government to support NPOs.
SUB-DIRECTORATE: NPO CAPACITY BUILDING
PURPOSE: To develop capacity building programme.
FUNCTIONS:Institutional capacity strengthening.Improvement standards of governance.Benchmark good practices.Assist provinces and local government to support NPOs.
SUB-DIRECTORATE: REGISTRATION FACILITY
PURPOSE: To maintain an efficient administrative facility for registration.
FUNCTIONS:Register Organisations in terms of the NPO Act..Monitor registered organisations in terms of the Act.Liaison with Law enforcement agencies for criminal investigations on non compliance offences.
SUB-DIRECTORATE: REGISTRATION FACILITY
PURPOSE: To maintain an efficient administrative facility for registration.
FUNCTIONS:Register Organisations in terms of the NPO Act..Monitor registered organisations in terms of the Act.Liaison with Law enforcement agencies for criminal investigations on non compliance offences.
SUB-DIRECTORATE: DATABASE MANAGEMENT & STAKEHOLDERS
LIAISON
PURPOSE: To create an environment within which the public access information on registered organisations. .
FUNCTIONS:Manage and maintain an efficient database of all registered organisations. Preserve documentations of registered organisations. Facilitate public access to records of organisations. Maintain an interfaced online public platform.Manage a call centre.
SUB-DIRECTORATE: DATABASE MANAGEMENT & STAKEHOLDERS
LIAISON
PURPOSE: To create an environment within which the public access information on registered organisations. .
FUNCTIONS:Manage and maintain an efficient database of all registered organisations. Preserve documentations of registered organisations. Facilitate public access to records of organisations. Maintain an interfaced online public platform.Manage a call centre.
Total number of 29 Staff members
Five Staff members
18 Staff member Three Staff members
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Conti…Organogram
NPO Registration & Compliance
NPO Capacity Building
NPO Directorate
NPO Database
Management
New Applications
Monitoring &
Compliance
Institutional Strengthening
Bench-marking
Online Database
Contact Centre
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Registration Process
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S.13 of NPO Act state that…. (1) A non profit organisation may apply for registration by –
(a) Filling in a prescribed form;(b) Two copies of founding document;(c) Any information to assist in determining whether the organisation meets the requirements.
Requirements for Registration
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Requirements for registration of NPOs (S12)
1. Any organisation that is not an organ of states may register.2. Unless the laws in terms of which an NPO is established make
provision for the matters in subsection 12(2), the founding document of the NPO that intends to register must have all required provisions as stipulated.
3. Written document (founding document) establishing an organisation. For example:- founding document (for voluntary association of persons) - memorandum and articles of association (for a Sec 21 company)
- trust deed (for a Trust)
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Registration Requirements (section 12(2))
New Applications are scrunitised: the application form
• the name of the organisation
• the physical address of the organisation
• the financial year end on the application form
• the particulars of the office bearers
• the details of the contact person including his/her signature
New Applications are scrunitised: the founding document
•Consistency with objects
•Composition of office bearers
•Dissolution undertakings
•Amendment Clause
•Legal Persona
•Property and Income Clause
•Financial Year End
•Decision making process
•Other relate conditions as stipulate in section 12 of the Act
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Act
ivit
ies
Key Actions The application
is record on central data by capturing the name of organisation and date on which it was received within the Department.
Quality ControlData Captured Assessment of
ApplicationSection 12
Recording of receipt of Application
Application is assessed against the requirements of section 12.
Applications declined are referred to back to the applicants & advising how to meet the requirements.
Those that meets the requirements are processed to the next level.
The information of organisations who have met the requirements are captured on the database. This include the list of the office bearers, the physical address of the organisation, the financial year end and the contact details of the contact person
Once all the information of the organisation has been captured on the database, the information is checked and the organisations status is changed to approved and send for the issuing of a certificate of registration.
The organisation is registered by issuing of the certificate of registration. The name of the organisation is added to the register of registered organisations. A certified copy of the founding document is also returned to the organisation.
Registration of Application Section 15
Registration Business Process
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Cont… Assessment of Applications
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Cont… Assessment of Applications
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Data capturing
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11082 10028
3097997
0
5000
10000
15000
Applicati
ons Rec
eived
Applicati
ons to be Proce
ssed
NPO's Reg
istered
Incomplete Applic
ations
Number of Applications
Data on New Applications
Of the Applications Assessed 80% (or 3097) were Accepted &
20% (or 997) were Rejected
Statistics are for the six month periodSeptember 2008 to February 2009
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MONITORING &
COMPLIANCE
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Compliance with the legislation
• NPO Act Sections 17 & 18 prescribes that:- all registered organisations must supply the
NPO Directorate with an annual report within 9 months of the end of its financial year.
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Accounting Records & Reports
Department of Social Department of Social DevelopmentDevelopment
(s17) Prescribes that: organisations must keep accounting records to
the standard of GAAP: Income and Expenditure (statements) Assets and liabilities (balance sheet)
Arrange written report compiled by an accounting officer.
Preserve each of its books of accounts, supporting vouchers, records of subscription.
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Duty to provide Reports and info
Department of Social Department of Social DevelopmentDevelopment
(s18) Prescribes that: organisations must; in writing provide:
1. Narrative report of its activities2. Financial statement
2.1 Accounting Officer’s report
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Duty to provide Reports and info
Department of Social Department of Social DevelopmentDevelopment
1. Narrative:
•Office bearers
•Contact details
•Id numbers
•Telephone numbers
•Number of meetings
•Annual General meetings
2. Financial:•Assets and Liabilities – balanced•Closing balance correspond with opening balance•Income and expenditure statement
3. Accounting Officer:• Expressed opinion on record keeping •Professional registration status
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Act
ivit
ies
Key Actions Database shows
organisations due to send reports
If the reports are not submitted within the 30 days.
the organization is deregistered and
a deregistration letter is sent to the organisation.
Appeal against De-registration
Sec 22De-Registration
Non-ComplianceSection 30
Monitoring
Letters of Non-compliance.
Notice allow for 30 months to compliance
Cancel the certificate.
Send-out cancellation letter and informing the organisation of its rights to appeal.
An organisation may refer the decision to be considered by arbitration Tribunal
Tribunal consider within 3 months and send a written notice of its decision.
Tribunal may uphold the appeal
ReinstatedAppeal denial.Organisation is
advice on corrective measures it ought to take.
Execute Arbitration Decision
Monitoring & Compliance
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Of the 2954 Reports Scrutinised Only 1179 (or 40%) of NPO’s
Were Deemed Compliant
44508
36570
7938
0
10000
20000
30000
40000
50000
NPO'sRequired to
SubmitReports
NPO's NOTSubmitting
Reports
NPO'sSubmitting
Reports
Number of NPO's
Data on Monitoring & Compliance
82% of NPO’s that are Required to Submit Compliance Reports have
Not Submitted their Reports
Statistics are for the six month periodSeptember 2008 to February 2009
That mean only 18% of NPO’s have Submitted theirCompliance Reports
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Voluntary Deregistration
(s23) An organisation may voluntarily deregister
by sending a written notice A report from previous financial year
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Access to Information
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Access to information
• Section 24 of this Act obligates the directorate to keep a register of:– all nonprofit organisations that have been
registered;– all nonprofit organisations whose registrations have
been cancelled; and– all nonprofit organisations that have voluntarily
deregistered or have been wound up or dissolved.
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NPO DBASE
• Information on registered organisations is captured on the dbase of NPOs.– Used as part of the business processes to registered
and monitor compliance to the Act.– Dbase runs on a SQL server, housed within the
Department and accessible via a centralized network server.
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Indexed Front Page
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39Classification of NPO’s
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Steady Increase in NPO Registration
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UN Classification of the Registered NPO’s
ObjectiveNumber registered
Business and Professional Associations, Unions 163
Culture and Recreation 2469
Development and Housing 10504
Education and Research 6780
Environment 616
Health 5758
International 35
Law, Advocacy, and Politics 1132
Philanthropic intermediaries and voluntarism promotion 515
Religion 5290
Social Services 13786
Else where 3376
Total 50424
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Chart of Classification
Percentage
0.32%
20.83%
13.45%
1.22%
11.42%
0.07%
2.24%
1.02%
10.49%
27.34%
6.70%4.90%
Business and ProfessionalAssociations, Unions
Culture and Recreation
Development and Housing
Education and Research
Environment
Health
International
Law, Advocacy, and Politics
Philanthropic intermediariesand voluntarism promotion
Religion
Social Services
Else where
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Registered NPO’s per Province
Province Number registered
Eastern Cape 4309
Free State 3038
Gauteng 16350
KwaZulu Natal 9602
Limpopo 5426
Mpumalanga 3178
North West 2562
Northern Cape 1196
Western Cape 4763
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Chart of provincial registration
9%6%
32%19%
11%6%
5%2%
9%
0% 5% 10% 15% 20% 25% 30% 35%
Eastern Cape
Free State
Gauteng
Kwazulu Natal
Limpopo
Mpumalanga
North West
Northern Cape
Western Cape
Pro
vinc
esPercentage
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Future Plans• Intention is to upgrade current dbase into online accessible
dbase for-– Registered organisations;– The broader public;– Government regulators; and– Other agencies.
• Digitize current records of all organisations.• As part of this initiative more than 1.8 million pages of
registered organisations records have been scanned and digitized.
• We are currently having a trial run on www.npo.gov.za
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Capacity Building
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Institutional Capacity Building • Section 5 (b) of the Act mandates
determine and implement programs- – Support organisations in their endeavour to
register; and – To ensure that the standard of governance
within NPOs is maintained and improved.
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Objectives of the trainingThe objective of the training is to strengthen and support organisations in the development of viable and appropriate governance and accountability structures through: -
•Supporting organisations to access the NPO registration facility
•Enabling organisations to comply with their obligations under the Act
•Ensuring that the standard of governance within NPOs is improved
•Capacitating CDPs to be able to support organisations
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Target groups for the training
The training is targeted at:
• Networking structures - so as to maximise impact
e.g. SANGOCO, CORN-SA, FAMSA etc
• Community Development Practitioners (CDPs): to enable them to interact effectively when supporting organisations
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Training workshops conducted for NPOs cover issues including:-
•Understanding the NPO sector (what is an NPO and how it operates)
•Legislative framework on NPOs (options for the legal structures of NPOs)
•Other pieces of legislation and international treaties affecting the NPOs and to which they must comply
•Process and procedure to register organisations
Aspects covered in the Training
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Multi-sectoral partnershipsDesigned multi-sectoral training programs in partnership with:
•Provinces through CDP Train- a-Trainer Programme
•National Youth Service- Unemployed graduates in line with EPWP
•SARS TEU (PBO and Income Tax Act)
•Department of Trade and Industry (Cooperatives)
•Support programs for Networking structures (ECD Congress, CORN-SA funding projects)
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Benchmark good governance practices
The Codes of Good Practice for the South African NPO sector was published in 2001
The need has arisen to review these Codes, owing to
•The dynamism and growth of the sector
•Low levels of good governance and accountability within organisations
• Need to align to the International and national norms and models of good practice
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Assist provinces and local government to support NPOs.
Assistance to provinces and local government is in the form of:
•Conducting capacity training for NPOs upon requests
•Conducting Train-the-Trainer workshops for CDPs
•Providing Database and other forms of information on all organisations registered, cancelled, deregistered and those that need assistance to comply
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Research Projects Impact Assessment on the NPO Act completed in 2006. Evaluation of a training programme for provincial department workers to support organisations.
• Benchmarking good governance and management practices within NPOs due for completion this financial
year.
• Assessment of structural composition of national bodies and networking organisations in respect of good
governance and management practices due for completion this financial year.
• Assessing the potential risk of terrorist financing posed within the NPO sector in South Africa to be completed this financial year.
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NPO Act Impact Assessment
• To assess whether the Act makes a difference to the sector.
• Five key themes drawn from the five objectives of the Act were used to frame the assessment.
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Key Findings• Fragmented Regulatory Framework.
• Government capacity to implement the NPO Act.
• Institutional capacity of organisations to access and maintain registration
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Fragmented Nature of the Act
• One of these challenges is the fragmented regulatory framework as it requires too many registration processes to comply with.– Even for a sophisticated and well-resourced
organisation, the numerous registration processes and compliance procedures are frustrating.
• ‘One size fit All’ approach
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Government Capacity
• The financial resources allocated for the implementation of the Act are insignificant when compared to the size, scope and vibrancy of the NPO sector on the one hand and the complexity of the NPO Act on the other.
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NPO Sector Capacity Constrains
Threat to efforts to maintain
high standards across the
sector
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Small CBOs often unable to meet minimum requirements set out by the Act – struggle to maintain compliance (capacity & cost)
Difficulty in meeting reporting requirements - limited levels of narrative and financial reporting
General lack of capacity within NPOs to manage own affairs, and to deliver quality services
Sector Capacity Constraints
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THANK YOU!
Questions Sessions