Non-Profit Organisations (NPOs) in South Africa and Gauteng in particular, play a pivotal role in helping government fulfil its constitutional mandate, especially for delivering on socio-economic rights.
These rights, enshrined in the country’s Bill of Rights, aim to improve the quality of life for all citizens and unlock their potential. Without a compliant, vibrant and effective non-profit sector, many of these rights would remain inaccessible to some South Africans.
NPOs contribute significantly to addressing societal challenges such as gender-based violence, substance abuse, healthcare, skills development, food security, elderly care, care for orphaned and vulnerable children, and care for persons with disabilities, among others.
NPOs are often at the coalface of service delivery, filling the gaps where government resources may be limited or slow to respond. Yet, while their work is invaluable, it is equally important that NPOs maintain strong compliance standards to ensure seamless service delivery and secure the necessary funding from the government and other funders.
The NPO environment in South Africa is primarily guided by the Non-Profit Organisations Act No. 71 of 1997. This legislation provides the framework for the establishment, registration, regulation, and oversight of these organisations to promote transparency, accountability, and proper governance.
NPOs must comply with the Act’s provisions to not only fulfil their legal obligations but to build trust with the communities they serve and the stakeholders that fund them.
It is the sole responsibility of the NPO to approach the National Department of Social Development for registration, and to submit compliance documents in order to retain its green status report on an annual basis.
Compliance requires organisations to adhere to their registration requirements which includes amongst others: objectives outlined in their founding documents, following procedures and timelines (such as convening Annual General Meetings and keeping minutes of all meetings), and maintaining detailed financial records.
In line with the Act, NPOs must submit an annual report to the NPO Directorate within nine months of the financial year-end. This report should include key elements such as a list of office bearers, the number of meetings held, progress toward achieving objectives, and any changes in contact details, along with a comprehensive financial statement.
Financial compliance is another critical area which NPOs must never take for granted. This compliance includes the ability of the NPO to account for the funds received from the Department and other donors.
Financial compliance will range from registration with the Central Supplier Database (CSD) in order to receive the funds, compliance with accounting and auditing standards, South African Revenue Service (SARS) requirements, the SLA provisions, monitoring and evaluation requirements.
These requirements are designed to ensure that government and donor funds are used appropriately and that organisations can maintain donor confidence.
Once registered as an NPO, the law requires NPOs to comply with legislation, policies, norms, and standards for the area of their operation. These legislations include among others, the Children’s Act, Older Persons Act, Prevention of and treatment for Substance Abuse Act, Child Justice Act, and so on.
Failure to comply with these legislations and policies will render any NPO non-compliant and therefore illegal to operate, and consequently not eligible for any financial support by the Gauteng Department of Social Development (GDSD) and donors. These registrations are done by the GDSD and NPOs can approach their local GDSD office for assistance.
Lastly, NPOs must comply with municipal by-laws in the area they are operating from, and these would include Health and Safety compliance, buildings and related requirements.
I must emphasise that while the GDSD always supports NPOs to comply, it is the sole responsibility of the NPOs to comply with municipal by-laws, and only approach GDSD for Programme Registration and Funding, with all compliance requirements in hand.
Once NPOs meet all compliance standards, they can apply for government funding. This process begins with a call for proposals based on the Department of Social Development’s priority programmes.
Depending on availability of funding, a number of NPOs will be signed up for the upcoming year. Organisations that qualify are subjected to site visits, followed by a panel review and the eventual signing of a Service Level Agreement (SLA).
The SLA is a binding contract between the organisation and the department, outlining the terms of funding and the organisation’s obligations in delivering the agreed-upon services.
While the government of Gauteng, particularly the Department of Social Development, acknowledges the essential role NPOs play in fostering social development, it is equally important to stress the significance of compliance.
Maintaining high standards of compliance is not merely a bureaucratic requirement; it is the bedrock of sustainable service delivery and long-term impact.
In conclusion, South Africa’s NPO sector is critical to realising the socio-economic rights enshrined in the Constitution, as a matter of emphasis.
However, to continue making a meaningful difference, these organisations must prioritise compliance. Without it, the sustainability of their services, their ability to access funding, and ultimately, their ability to serve the communities that rely on them, will be jeopardised.
As the government, we are committed to supporting NPOs, but this support is contingent on their adherence to the laws and regulations that govern the sector. Compliance is not a burden —it is the foundation of growth, sustainability, and, most importantly, societal impact.
Faith Mazibuko is the MEC for Social Development in Gauteng