Recent media reports uncovered a serious lack of compliance by the NPO sector.

Earlier today it has been revealed that five of the six NPOs associated with President Zuma are non-compliant with the NPO Act.

NPOs are required to file annual reports with the Department of Social Development (DSD). In addition to the NPO Act, NPOs – although tax-exempt – are also required to file tax returns with the South African Revenue Service (SARS).

According to the Ministry of Social Development, more than half of the 140 513 NPOs on the database of the department are non-compliant.

The South African Institute of Tax Professionals (SAIT) and Chartered Institute for Business Accountants (CIBA) responded to the breaking news by offering a pledge to the value of R10m to NPOs in attaining compliance with regulatory filing requirements with SARS and the DSD.

“The NPO sector is critical in democratic South Africa today. NPOs are critical stakeholders and are contributing significantly to uplifting the poor and destitute from poverty,ˮ says Stiaan Klue, Chief Executive of the SAIT.

Various pieces of legislation impose hefty regulatory requirements on the NPO sector. A compliant and well-managed NPO receive millions from donors and government.

“It will be a sad day in our democracy if NPOs do not receive quality professional support to remain operational,” adds CEO of CIBA, Nicolaas van Wyk.

“The end result will be that donor funds may not reach the intended recipients.ˮ

A valid concern is that disorganised NPOs may not deliver on their legal obligation, and this will lead to the sector being accused of a lack of accountability and transparency. If these allegations go unchecked it may seriously affect the ability of the whole sector to draw in new donor funds.

“The NPO sector therefore needs to commit to improved performance and compliance,” warns Van Wyk.

“However, as professional bodies, we realise that volunteers manage most NPOs, with a passion for helping the poor,ˮ says Klue. “Under dire and difficult circumstances these volunteers allocate all of their time to helping people in need. It is therefore perhaps understandable that compliance may fall by the way side.”

With a combined membership of close to 20 000 tax practitioners and accountants, CIBA, SAIT and their members stand ready to heed the call of Minister Dlamini and commit R10m in professional services to the sector.

NPOs in distress should contact technical@saiba.org.za as soon as possible.