With December upon us, the spirit of giving may have snuck its way into your heart. Are you considering how you can make a difference this season?
There are many charities, NGOs, and foundations in South Africa that are always in need of additional funding to support the causes they stand for. Donating to one of these is a meaningful way of making an impact, even if just a small one. We have compiled a list of things to consider and be mindful of when donating – what different organisations stand for, what it means to receive a tax return, and how to ensure that your gift is entrusted to those with the right intentions.
Find something you care about
When it comes to choosing where to send your donation, take a moment to look for an organisation working towards something you care about. South Africa has many organisations that need help, searching for the one you wish to support may be overwhelming at first. Just remember, your contribution will make a difference where it needs to. Start by asking yourself if you would like to give to an environmental or social cause. This will narrow down your search and help you find a cause that will allow your donation to really mean something to you too.
Understanding terms: NPO and PBO
You may have come across different initialisms describing organisations working for public benefit. These are not necessarily interchangeable and it is important to understand why and what the differences are. In South Africa, foundations may be listed as either non-profit organisations (NPO/NGO) or public benefit organisations (PBO’s).
NPO
‘NPO’ is the umbrella term for any entity (including non-registered) that does not seek to make profit from its projects. These organisations may apply for an NPO number, issued by the Department of Social Development under the NPO Act. Through this, NPOs can gain access to government and corporate funding, may grow their public recognition, and demonstrate that they are transparent and accountable for their activities.
Key to note with NPO’s, is that having an NPO number does not grant the organisation tax benefits. For you, as a potential donor, this means that your donation would not qualify for a tax return. This is where PBO status comes into the picture.
PBO
To be recognised as a PBO, organisations need to have registered with the South African Revenue Service (SARS), where their activities must fall under those stipulated by the Income Tax Act. Acquiring PBO status will grant a foundation the opportunity to be exempt from tax, making any donations eligible for tax return applications (in essence, you will receive a tax deduction on your donation when you file your taxes). Not only this, but being aware that an organisation is a PBO will assure you that all the money you donated will go to its intended cause and will not be partly channelled into the country’s taxes and duties.
Paperwork
Sadly, there are people out there who want to take advantage of good hearts; scammers use all kinds of tactics to divert money from reaching causes with a real purpose. One of the best ways to ensure the legitimacy of an organisation, is to request to see certification. PBO status is the only one that is more difficult for NPO’s to acquire, and so there is no need to feel weary if this certificate cannot be produced at the time. However, all other paperwork should be in order and you should at the very least be able to see NPO certification. For tax exemption, ask to see a Section 18A certificate.
Check out social media
Alongside requesting official documentation, doing a bit of sleuthing on social media is a good way to see if an organisation is actually doing what they are claiming to do. Look out for photos, testimonials and statistics, and pay attention to the regularity of posts.
Pay the organisation a visit
Of course, the proof is in the pudding. Why not ask the organisation if you can pop in to see what they do? Most NPO’s and PBO’s will have no problem giving you a tour. While a no to this request can raise a red flag, it is important to use your own discretion here – some organisations are protecting the identity of the people they are trying to help and so would not be open for public visits. For this reason, it would be a good idea to use this method of checking reliability alongside the other suggestions we have listed above.
Payment methods and keeping records
Once you have determined the legitimacy of an organisation, you should feel comfortable to send your contribution. With this step, it is important to be sure that you are using a safe payment method. Head straight to the foundation’s official website to see the donations protocol they have set up – avoid paying through a link provided on a social media post.
Once you have donated, review your bank statements carefully, checking that you were only charged what you agreed to send, and that you have not been signed up as a recurring donor (if you did not choose this option yourself). Keep record of all donations that you make, so that you can follow-up if you suspect foul-play.
Conclusion
Having a heart for giving is a beautiful thing. While there are always those who will try to exploit a kind gesture, do not be discouraged. There are many who will be truly grateful for your gift and will use it to improve the lives of others in impactful ways.