Transcript NPO Directorate PowerPoint presentation

Nonprofit Organisations
Directorate
Uganda, Kenya & Tanzania
Delegations
WELCOME
08 July 2008
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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 Organisation
 Encompasses 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
• Between 60,000 to100,000 organisations
• Half (53%) classified as informal and voluntary
community-based organisations
• Social services (22%), culture and recreation (2O%),
• Development and housing (20%), health (7%),
education (6%) and environment (3%)
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NPO Sector Profile: Income
Total income R14 billion
Government provides R5.8 billion (42%)
R500 million from overseas development
assistance
Self generation (fees, sales, membership dues)
29%
Private sector donations (25%)
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NPO Sector Profile: Location
 87% based in communities
 8.7% provincially based
 4.5% 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.
12
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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Regulatory Framework on NPOs
Sec 21 Companies
(Companies Act of 1973)
Trusts
(Trust Property Control
Act of 1988)
Traditionally informal
organisations rooted in
communities. Often lack
capacity & access to
resources
Voluntary Associations
(Common Law)
Large, sophisticated
predominately urban
based with conventional
Organisational
Development Systems.
Mostly have all relevant
skills & capacity
Nonprofit Organisations Act 71 of 1997
(All have to meet the same compliance requirements)
Public Benefit Organisations
(Tax Exemption Status incl. skills development levies)
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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; and
d) Facilitating the development and implementation of multisectoral and multi-disciplinary programs
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Organogram of Directorate
DIRECTORATE:
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
Total number of
29 Staff members
FUNCTIONS:
Develop Institutional Capacity Building Programmes.
Administer an efficient registration facility.
Database management and stakeholder liaison.
Five Staff members
SUB-DIRECTORATE:
NPO CAPACITY BUILDING
18 Staff member
SUB-DIRECTORATE:
REGISTRATION FACILITY
PURPOSE:
To develop capacity building programme.
PURPOSE:
To maintain an efficient administrative facility
for registration.
FUNCTIONS:
Institutional capacity strengthening.
Improvement standards of governance.
Benchmark good practices.
Assist provinces and local government to
support NPOs.
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.
Three Staff members
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.
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Conti…Organogram
NPO Directorate
NPO
Registration &
Compliance
New
Applications
Monitoring
&
Compliance
NPO
Capacity
Building
Institutional
Strengthening
Benchmarking
NPO
Database
Management
Online
Database
Contact
Centre
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Registration Process
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Requirements for Registration
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.
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Requirements for registration of NPOs
(S12)
1.
2.
3.
Any organisation that is not an organ of states may register.
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.
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
New Applications are scrunitised: the
founding document
• the name of the organisation
•Consistency with objects
• the physical address of the
organisation
•Composition of office bearers
• the financial year end on the
application form
• the particulars of the office bearers
• the details of the contact person
including his/her signature
•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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Registration Business Process
Recording of receipt
of Application
Assessment of
Application
Section 12
Data Captured
Activities
Key Actions
 The application is  Application is  The information
of organisations
record on central assessed
who have met
data by capturing against the
the requirements
requirements
the name of
are captured on
organisation and of section 12.
the database.
date on which it  Applications
This include the
declined are
was received
list of the office
referred
to
back
bearers, the
within the
to
the
applicants
physical address
Department.
& advising how
to meet the
requirements.
 Those that meets
the requirements
are processed to
the next level.
of the
organisation, the
financial year end
and the contact
details of the
contact person
Quality Control
Registration of
Application
Section 15
 The organisation is
Once all the
registered by issuing
information of the
of the certificate of
organisation has
registration. The name
been captured on
of the organisation is
the database, the
added to the register
information is
of registered
checked and the
organisations. A
organisations
certified copy of the
status is changed founding document is
also returned to the
to approved and
organisation.
send for the
issuing of a
certificate of
registration.
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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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Data on New Applications
Number of Applications
15000
11082
Of the Applications Assessed
80% (or 3097) were Accepted &
20% (or 997) were Rejected
10028
10000
3097
5000
997
0
Applications
Received
Applications
to be
Processed
NPO's
Registered
Incomplete
Applications
Statistics are for the six month period
September 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
(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.
Department of Social Development
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Duty to provide Reports and info
(s18) Prescribes that:
 organisations must; in writing provide:
1. Narrative report of its activities
2. Financial statement
2.1 Accounting Officer’s report
Department of Social Development
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Duty to provide Reports and info
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
Department of Social Development
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Monitoring & Compliance
Activities
Monitoring
Non-Compliance
Section 30
De-Registration
Appeal against
De-registration
Sec 22
Execute
Arbitration
Decision
Key Actions
 Reinstated
 An organisation
 Database shows  Letters of Non-  Cancel the
may refer the
compliance.
 Appeal denial.
certificate.
organisations
decision to be
due to send
 Notice allow for  Send-out
 Organisation is
considered
by
reports
30 months to
advice on corrective
cancellation
arbitration
 If the reports are compliance
measures it ought
letter and
Tribunal
to take.
informing the
not submitted
 Tribunal consider
organisation of within 3 months
within the 30
its rights to
days.
and send a
written notice of
appeal.
 the organization
its decision.
is deregistered
 Tribunal may
and
uphold the appeal
 a deregistration
letter is sent to
the organisation.
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Data on Monitoring & Compliance
Number of NPO's
50000
44508
36570
40000
30000
20000
10000
82% of NPO’s that are Required to
Submit Compliance Reports have
That
only 18%
NPO’s
Not mean
Submitted
their of
Reports
have Submitted their
Compliance Reports
Of the 2954 Reports Scrutinised
Only 1179 (or 40%) of NPO’s
Were Deemed Compliant
7938
0
NPO's
Required to
Submit
Reports
NPO's NOT
Submitting
Reports
NPO's
Submitting
Reports
Statistics are for the six month period
September 2008 to February 2009
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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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Classification of NPO’s
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Steady Increase in NPO Registration
Number of Registered NPO's
60000
50000
40000
30000
44222
49826
55934
20000
10000
0
2006 to 2007
2007 to 2008
End of Feb 2009
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UN Classification of the Registered NPO’s
Objective
Business and Professional Associations, Unions
Culture and Recreation
Development and Housing
Education and Research
Environment
Health
International
Law, Advocacy, and Politics
Philanthropic intermediaries and voluntarism promotion
Religion
Social Services
Else where
Total
Number
registered
163
2469
10504
6780
616
5758
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1132
515
5290
13786
3376
50424
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Chart of Classification
Percentage
Business and Professional
Associations, Unions
Culture and Recreation
Development and Housing
6.70%
0.32%
4.90%
20.83%
27.34%
Education and Research
Environment
Health
International
13.45%
10.49%
1.02%
2.24%
0.07%
1.22%
11.42%
Law, Advocacy, and Politics
Philanthropic intermediaries
and 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
Percentage
Provinces
Western Cape
Northern Cape
9%
2%
5%
6%
North West
Mpumalanga
Limpopo
11%
19%
Kwazulu Natal
Gauteng
Free State
Eastern Cape
0%
32%
6%
9%
5%
10%
15%
20%
25%
30%
35%
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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 training
The 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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Aspects covered in the Training
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
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Multi-sectoral partnerships
Designed 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
56
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
57
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
Severe Capacity
Constraints
Weak Corporate
Governance and
Reporting
Lack of Capacity
Building Support
Threat to efforts
to maintain
high standards
across the
sector
Lack of Information and
Knowledge
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Sector Capacity Constraints
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
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THANK
YOU!
Questions Sessions
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