Tuesday 27 August, 2002 - 23:00
| The Non Profit Partnership (NPP) 1 was launched in 1998 to develop financial sustainability for the nonprofit sector. Its members believe that because corporations and governments are beneficiaries of the nonprofit sector’s work in society, they should help ensure the sector’s long-term financial future. In addition to money, corporations can strengthen the nonprofit sector by providing a variety of resources, said NPP Director Eugene Saldanha. This includes volunteer time, advice, human resources, company resources and skills training. In-kind donations such as computers, photocopying machines and use of these services are also beneficial. Unfortunately, Saldanha said, "corporates have a comfort zone after writing out a check." 1 In 1998, the South African NGO Coalition (SANGOCO), |
One example of a member of the corporate world who provided assistance is a bank’s ex-chief executive officer, who told the NPP that he was available to help for six months. He now offers advice and accompanies the NPP to negotiations with corporations. His involvement has lengthened beyond the original six months, and Saldanha is hoping he will become a NPP board member. This is the kind of giving the NPP wants to nurture in the national corporate culture. Some corporations have begun to embrace corporate citizenship, even if largely as a business or political imperative. ABSA, one of South Africa’s largest banks, is one of them. It operates a foundation that has R15 million ($1.8 million) in assets and it funds education, income generation and HIV/AIDS projects. Gail Campbell, ABSA Foundation’s consultant for corporate social investment, said surveys conducted throughout the bank show that staff members are interested in promoting social responsibility projects. |
| "Ninety-two percent of bank staff said they would like to get involved in some of the community work the foundation is funding," she said. Seventy-three percent of the bank’s 34,000 employees said "yes" to the "give as you earn" concept, which could add up to substantial sums of money for development projects. The number of participants would have been even higher had people known they could give as little as R1 ($0.125) a month, Campbell said. Promoting such workplace giving is one of three of NPP’s major programs that has received Mott Foundation support totaling $163,000 (R1.3 million) through June 2001. An example of a workplace giving program that has been successful for many years is the one based at the Western Cape Community Chest. This program is facilitated by the trade union movement, which raises money from, among others, low-paid textile factory workers. Workplace giving programs also raise money from highly-paid executives. In the Western Cape, workers raised R2 million ($250,000) for the Community Chest in 2000, thereby helping support the work of 472 welfare and social development programs in the province. |
Meanwhile, the NPP has successfully negotiated a medical aid and emergency needs fund for employees in the nonprofit sector. It has also conducted public policy work to push for lottery funds to be distributed to nonprofit organizations and has negotiated lower bank service charges for the sector. But perhaps its most successful campaign to date has been to get tax laws amended to benefit the nonprofit sector. South Africa’s new tax law broadens the definition of "public benefit organizations" that qualify for tax exemption. In addition to other expansions, the beneficiary category now includes pre-primary and primary schools, homes for children and the aged, and organizations providing HIV/AIDS care. The limit on tax deductions for donations from individuals has been raised from 2 percent to 5 percent annually, an amount that Saldanha describes as "disappointing" because it didn’t go far enough, even though it is in line with companies. Even if the latter is more symbolic than significant, the NPP and other nonprofit organizations have forced the government to listen. The NPP still wants to see tax breaks for those who donate goods, not just cash. |
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The Mott Foundation has supported the NPP’s successful campaign to make the country’s tax laws more favorable for the nonprofit sector. Tax laws could encourage greater giving from individuals and families. In particular, estate duty and inheritance tax laws could be amended to encourage more of this kind of giving. The great reserves of untapped individual and family wealth in South Africa could be vested in promoting a sustainable NGO sector. Trevor Manuel, the minister of finance, has acknowledged the role the nonprofit sector plays and recognizes that the tax law changes have not gone far enough. Still, the NPP’s work in tax legislation has given hope and help to non-governmental organizations (NGOs) in neighboring countries, including Zimbabwe and Namibia, Saldanha said. Information-sharing, through phone calls and conferences such as the International Conference on Income Tax and the NGO Sector, held in March 2001 in South Africa, is making way for tax law changes in the southern region of the continent, he said. |
