Greater Good South Africa

Non profit expert attorneys Nicole Copley and Ricardo Wyngaard and accountants Sandra Wilson and Cathy Masters from CMDS have responded with the facts to recent emails that have been doing the rounds warning of new or increased compliance requirements. Their advice: don't panic, there are no new or increased compliance requirements. Just keep on top of the basics or, if you are worried, consult your attorney or accountant.

As NGO/NPO consultants, we would like to assure our clients and friends that, contrary to advice given in recent emails advertising training workshops, there are no ‘new’ or ‘increased’ compliance or reporting requirements which are of general application to the NGO/NPO sector:

• The requirement for organisations that are registered in terms of the NPO Act to file annual narrative and financial reports with the NPO Directorate has existed since 1998;
• The requirements for approved public benefit organisations to submit the prescribed tax returns to SARS annually, to amend their founding documents in line with section 30 of the Income Tax Act and to comply with certain other conditions for PBO approval have been around since the year 2000; and
• It has always been a fiduciary responsibility of the governing bodies of NGOs/NPOs to ensure that financial statements comply with the requirements of relevant legislation.

For those NGOs/NPOs that are non profit companies (formerly called section 21 companies), there is one new requirement - to pay your ‘annual return’ fees to keep you registered with the Companies and Intellectual Properties Commission. This requirement does not apply to voluntary associations or trusts.

As consultants to the sector, we always advise our clients to comply with the law and to keep on top of reporting requirements - this is good governance practice, keeps donors happy,  ensures registrations and exemptions remain intact and avoids the need to pay interest and penalties when returns/payments are made late or overlooked.  We realise that there may be organisations and office bearers who feel that they are not familiar with all of the compliance requirements but  we do advise against unnecessary panic.

Governing body members who pay attention to the basics, act with a reasonable degree of care, skill and diligence, and are not negligent or fraudulent in carrying out their duties will continue to be protected from personal liability. Please do not hesitate to contact us if you would like some specific advice or any assistance with compliance.