Financial Compliance Guide for Donations to Non-Profit Organisations

By Ryno Engelbrecht

Animal Welfare Organisations are normally registered as “non-profit organisations” or “non-profit companies”, both of which are regulated by the provisions of the Non-Profit Organisations Act 71 of 1997 (as amended).

Most Non-Profit Organisations are dependent on fundraising and donations from the general public in order to fulfil their mission statement in respect of a specific cause.

A donation received from a member of the general public would normally be earmarked for a specific cause, and therefore such a donation may not be utilised for any other purpose without the consent of the respective donor.

Receiving donations from the general public attracts accountability as to how these funds are utilised.  Non-Profit Organisations therefore must at all times be able to account as to how public donations have been utilised.

Statute also imposes certain statutory requirements that Non-Profit Organisations are obliged to adhere to.  Such requirements include:

  • Ensuring the drafting and audit of annual financial statements.
  • Submission of statutory returns.
  • Holding annual Members meetings for the approval of financial statements.

Directors, Members or Officers of these Organisations falling foul of the aforementioned statutory provisions, may attract personal liability.

Non-Profit Organisations must adhere to the statutory provisions or may have their non-profit status revoked by the Department of Social Development.  This would impact the receiving of donations from the general public.   In such an instance, the only party that will suffer will be the rescued animals in the care of such an organisation.

 

About the Author:
Ryno is very active in his community with Animal Welfare and is an Insolvency Practitioner at ClaimsCo.

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