NPOs and the Enemy Within

politics ngos regulation NPO Act de-registration
Tuesday, 5 March, 2013 - 11:26

In this article, the author questions the controversial move by the Department of Social Development to de-register thousands of nonprofit organisations earlier this year

Social Development Minister Bathabile Dlamini must wonder what has just hit her. There she is, happily de-registering nonprofit organisations (NPOs) by the tens of thousands, and suggesting innocuous amendments to laws governing their work - and all hell breaks loose. She will find answers in our history, her department’s incompetence, and a view of charity held by many South Africans. Then there is NPO suspicion of politicians even when real danger is coming not from them, but from the private sector.

Ours are a generous people. A 2010 Barclays Wealth report ranks South Africans as second only to Americans in philanthropy. Statistics South Africa counts 1.4 million people volunteering time in anything from community policing to feeding schemes. Despite straightened times, corporate social investment jumped to almost R7 billion in 2012, up from just over R5 billion three years ago, reckons analytical group Trialogue. Dlamini’s own department gets 71 new NPO registration requests a day, and this rises 14 percent a year.

Legally, it is dead easy to start an NPO, but authority has not always been supportive. The 1972 Schlebusch commission harassed anti-apartheid NPOs and prescribed their foreign funding. A Fundraising Act made collecting money dependant on a state-issued fundraising number; and criticism of government was chilled.

Come 1995, and an NPO with strong ‘struggle’ ties campaigned for even tighter controls. A state tribunal would assess NPOs at will, close down those it did not like, and even appoint members of NPO governing bodies. This writer was part of the resultant outcry, and served on a ministerially-appointed committee to propose changes to the Fundraising Act. The NPO Act of 1997 followed, scrapping altogether the need for fundraising numbers, and even of registration at all.

NPOs can register with minimal reporting requirements, but are not bound to. If they want special tax advantage and Seta payment exemptions, they follow the route of getting the required tax status from South Africans Revenues Services. They are naturally also bound by common law and relevant legislation depending on their being trusts, or nonprofit companies or just voluntary groupings.

Now two things have caused some, such as the formidable head of prominent NPO Inyathelo – The South African Institute for Advancement, Shelagh Gastrow, to imagine we are back to 1995: the recent ‘deregistration’ of perhaps 50 000 NPOs by the state, and government proposals for a mild tightening of NPO law. If the first has occurred to compliant NPOs, then it may be more incompetence than malice, given that those affected include the Jacob Zuma Foundation and the Nelson Mandela Foundation.

The second involves fairly timid proposals to introduce especially governance advisory services, and to establish a tribunal to mediate NPO-government disputes. It does not take us back to the past, and Gastrow, brave and alert though she is, surely gilds the lily in saying that NPO freedoms are under their greatest threat since apartheid.

A far graver danger lurks in unthinking ‘good governance’ proposals (part of ‘King III’) that all-out and complicated reporting be required of ‘all entities’, right down to community-based voluntary groups – a move beloved of bean counters but that could strangle community innovation and severely restrict free association. Against this, it must be said, Gastrow has also led an increasingly successful fight to stop us going down a private sector-designed road, paved with good intention, straight to compliance hell.     

- By Paul Pereira, owner at WHAM! Media. This article was first published in The Citizen. It is republished here with the permission of the author. 

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