In South Africa, Nonprofits Seek Answers from Government

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John-james Gerber /

January 23, 2013; Source: GroundUp

Tens of thousands of South Africa’s nonprofit organizations have recently been deregistered or declared non-compliant by the government’s NPO Directorate, which is a branch of the Department of Social Development. The move reportedly took many nonprofits by surprise during the country’s festive season. The Department of Social Development’s Lumka Oliphant confirms that 23,035 nonprofits were either deregistered or declared non-compliant.

Oliphant explains that deregistration occurs when nonprofits fail to comply with the South African NPO Act’s requirements to submit activity reports, financial statements and a registered accounting officer’s report. The non-complaint groups remain registered but must submit those reports or else they face deregistration. Shelagh Gastrow, executive director of the South African nonprofit assistance organization Inyathelo, states that her agency was deemed non-compliant even though it had submitted an annual report and the requisite accounting information. If the controversy isn’t resolved, Gastrow told GroundUp that Inyathelo may, as a last resort, mobilize nonprofits for “a class action against the NPO Directorate for administrative inefficiency and bad faith.”

Gastrow’s frustration may be due to the dire consequences deregistration has on the country’s nonprofits: “All rights, benefits and allowances it enjoyed as a result of being registered end immediately” with deregistration, Gastrow notes, so donations would no longer be tax-deductible. Meanwhile, another group, the Social Justice Coalition (SJC), tells GroundUp that it found out it was deregistered from a donor; SJC Operations Manager Leslie Liddell says the group may simply apply for a new registration but that it also supports Inyathelo’s efforts to redress the situation.

What brought on this massive change in the status of so many South African nonprofits? Sasha Stevenson, an attorney with the public interest law center SECTION27, suspects that it is linked to a proposal to amend South Africa’s Nonprofit Organisations Act of 1997—a proposal that has largely flown under the radar of the country’s nonprofit sector. Stevenson believes that the framework document “is not, bar a few problematic provisions, cause for alarm.” The proposed policy framework includes the creation of a new agency, the South African Nonprofit Organizations Regulatory Authority (SANPORA), which the proposal document says would “allow greater flexibility to deliver…efficient regulatory oversight to nonprofit organizations.” The policy framework is available here. NPQ will keep an eye on this situation as it develops. –Louis Altman

  • Ann Bown

    As the third sector we are dealing with incompetence and weak systems both within our own structures and that of government.

    The newly introduced automated database system has been a wake-up call to the non-profit sector in South AFrica, this is correct. However, plans to move away from an antiquated, inefficient manual process has been in the pipeline for more than 5 years, recent de-registrations and non-compliance status to thousands of NPOs is linked to a speedier system that was only introduced in late 2012.

    Many of the organisations de-registered have neglected to submit reports for more than 3 years whilst the NPO Directorate administration system lags behind in its verification of submitted reports.

    Deregistered organisations have the right to an Appeal. Sadly, the Appeal Tribunal, as required by the NPO Act of 1997 completed its term of office last March – they were asked to serve a second term but not re-appointed by the Minister.

    Proposed amendments to the NPO Act of 1997 are currently under watchful eyes of civil society groups. The Minister of Social Development has appointed a Task Team to scrutinize the amendments and proposals. Ann Bown, a civil society activist.