The South African National NGO Coalition (SANGOCO) is a nonprofit organisation that promotes civil society, by uniting and strengthening the civil society sector, to enable it to influence development policy, and advocate for programmes that meet the needs of the poor in the best possible way, at the least cost.
Because the old 10(1)(f) exemption prohibited trading, and the new 2000 laws restricted it severely, NGO’s which wished to generate revenue to sustain their activities were forced into setting up dual structures: one organisation which was tax exempt and received donor funding, and another which did the income-generating work, and then donated the funds to the tax exempt organisation.
Is the international credit crunch affecting the funding of South African NGOs? If it is, this is only the latest in a series of developments - beginning with the diversion of funding away from NGOs after 1994 - that has led to NGOs focusing on business development and sustainability, in an attempt to lessen their reliance on donor funding.
Of course, the NGOs that wish to generate revenue, do not intend to distribute any profits made, but to plough them back into the achieving of their objectives.