International Day of Charity is celebrated worldwide on 5 September every year to encourage individuals, companies, and organisations to support those in need. However, the impact of your generosity is profoundly influenced by the organisation you choose to support.

Inyathelo, a leading advocate for non-profit sustainability, highlights the importance of selecting a well-governed, reputable non-profit organisation (NPO) to ensure that your contribution is used effectively.

Philanthropy Versus Charity

South African organisations prefer to use the term "philanthropy" rather than "charity", says Inyathelo acting executive director Feryal Domingo. This approach emphasises strategic, long-term investment in development and social change, rather than simply addressing immediate needs through one-off acts of giving.

The success of an NPO hinges on its governance, says Domingo. Responsibly managed NPOs are more likely to achieve their missions, leverage resources efficiently, and maintain the trust of donors, beneficiaries, and the broader public.

“Poor governance can lead to financial mismanagement, mission drift, and even the closure of the organisation. For donors, selecting a well-run and effectively administered NPO is essential to ensure that their contribution has a meaningful impact,” Domingo notes.

Understanding Section 18A Tax Benefits

Supporting a reputable NPO is crucial for tax purposes, Domingo emphasises. Only donations made to South African organisations with valid Public Benefit Organisation (PBO) status and Section 18A approval from the South African Revenue Service (SARS) are eligible for tax deductions.

These organisations are legally able to issue a Section 18A certificate, which donors can use to claim a deduction on taxable income, thereby reducing their tax liability. This ensures that your donation is both impactful and tax-efficient.

The NPO Landscape in South Africa

By 30 June 2023, there were:

• 276,183 NPOs registered with the Department of Social Development (DSD).
• 59,657 PBOs registered with SARS.
• An estimated 60,000 non-registered voluntary associations operating in the country.

Tips for Choosing a Reputable NPO

Domingo offers several tips for choosing a reputable NPO before making your contribution. Viewing an organisation’s website, which should include a link to its latest annual report, is a good starting point.

1. Verify Registration and ComplianceEnsure that the organisation is registered with the DSD and has PBO status.

2. Review Governance StructuresA reputable organisation has an experienced, diverse board of directors or trustees. The board should meet regularly and provide oversight to ensure the organisation’s strategic direction aligns with its mission.

3. Examine Financial StatementsExternal auditors are responsible for independently auditing and reporting on financial statements. A well-run NPO is transparent about its income, expenditure, and resource allocation. It should also have a reserve fund to ensure financial stability and the ability to continue operations during unforeseen circumstances or funding shortfalls.

4. Assess Impact and OutcomesA reputable organisation has clear, measurable outcomes and reports regularly on its progress towards achieving its goals. Case studies, testimonials, and third-party evaluations are valuable tools for assessing an NPO’s effectiveness.

5. Ensure Ethical PracticesCredible NPOs follow guidelines set out by the Independent Code of Governance for Non-Profit Organisations in South Africa.

6. Consider Longevity and ReputationEstablished NPOs with a long history of service are often a safer choice, as they have proven resilience and adaptability. However, newer organisations should not be dismissed if they have strong governance measures in place.

7. Request ReferralsDon’t hesitate to ask for recommendations from trusted sources, such as other donors, community leaders, or organisations that work closely with the non-profit sector.

Conclusion

"Keep in mind that it matters where you direct your generosity,” concludes Domingo. “We encourage benefactors to take the time to research NPOs before making a contribution, whether it is a donation, endowment, sponsorship, bequest, or other form of support."

“It’s also advisable to consult a financial advisor before making a significant contribution, for tax, estate planning, and regulatory considerations.

“On International Day of Charity, let's celebrate the power of philanthropy to create a more just and equitable South Africa. By supporting reputable NPOs, we can all contribute to a brighter future.”

About Inyathelo

Inyathelo is dedicated to building capacity and resilience in the South African non-profit sector by promoting good governance, ethical practices, and sustainability. The organisation provides resources, training, and support to help NPOs strengthen their operations and achieve long-term success. For more information, visit www.inyathelo.org.za or contact info@inyathelo.org.za.

Independent Code of Governance

Download a copy at: https://www.governance.org.za/the-independent-code/

NOTE TO EDITORS

The International Day of Charity was declared by the United Nations General Assembly in 2012 and is observed every year on 5 September. This date was chosen as it marks the day on which Mother Teresa of Calcutta, who received the Nobel Peace Prize in 1979, died. Its main purpose is to raise awareness and provide a common platform for philanthropic-related activities all over the world for individuals, charitable, philanthropic, and volunteer organisations.

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Press Release Submitted By:Meropa Communications

On Behalf Of:Inyathelo: The South African Institute for Advancement

Contact:Judy BryantEmail: judyb@meropa.co.zaContact Number: 083 286 7168

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