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Sometimes when a new NPO approaches us at Funding Solutions for fundraising assistance, they are unsure what the difference is between their NPO registration and their legal status, let alone how to receive tax deductible donations.
By law, non-profits in South Africa are required to register with the Directorate for Non-profit Organisations which is located within the Department of Social Development (DSD). Once registered, you are also required to annually submit your financial and narrative reports to this NPO Directorate (npoenquiry@dsd.gov.za ) and keep up to date the required information about the NPO.
But what about the legal status of your NPO? In South Africa, the NPO has one of three options, here in order of accountability to your stakeholders: as a Voluntary Association, a non-profit Trust – registered with the Master of the High Court, or as a non-profit Company (NPC) – registered with the Companies and Intellectual Property Commission (CIPC).
Lastly, the South African non-profit can apply to the South African Revenue Service (SARS) for Public Benefit Organisation (PBO) Status and, if eligible, also for approval to issue receipts under section18A, if it is eligible. This allows the non-profit to provide receipts under section 18A of the Income Tax Act to its donors upon receipt of bona fide donations for the eligible public benefit activities, which provides the donor with the benefit of a tax deduction in return for their generosity to said non-profit.
(With thanks to Ricardo Wyngaardt https://nonprofitlawyer.co.za/index.php)

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