What you need to know before establishing an NPO
Running an organisation requires various skills such as project management, financial management, good governance, and fundraising skills. Many NPOs lack resources and the necessary know-how to function.
Before registering an NPO please consider the current economic climate and other potential challenges specific to the service that you intend to render. The more information you have the more likely you are to make better choices regarding the type of organisation you wish to register. Here are some considerations.
Follow a 4-step process for a functioning NPO
1. The Board
The legislation governing NPOs in South Africa states that board members are appointed to govern the organisation. The role of the board is different from the role of other staff members and volunteers that run the programmes. Board members are legally responsible for the organisation and must ensure that the organisation’s objectives are achieved, in line with its Vision and Mission.
It will assist the organisation greatly in running an NPO if board members have the necessary skills and experience required to run an NPO such as human resource, financial skills and policy development skills in order to provide good governance, transparency and accountability.
It is important to avoid issues such as conflict of interest and nepotism by developing board portfolios. If there is no monetary gain, state that the service is voluntary.
It is therefore important that new board members are fully orientated with the necessary information.
2. Founding document
Once an organisation has established a board (governing structure), a founding document such as a Constitution, Memorandum of Incorporation or Trust Deed, is required. The founding document of any organisation informs and regulates the work/service on offer. This document must comply with the Non-Profit Organisations (NPO) Act 71 of 1997 requirements. Organisations might consider using the Model Constitution template. This document is also legally binding and must contain certain clauses to qualify for NPO registration.
To get assistance with your online application visit the Western Cape NPO Help Desk at Customer Contact Service Center, 9 Wale Street, Cape Town. A consultant will attend to your requirements. Once registered you will receive an NPO certificate, thereafter it is a legal requirement to be compliant with the NPO Act.
A list of the appropriate forms and guidelines are available below.
Many organisations register an NPO without doing the necessary research on the legal requirements for running an NPO. Approximately 67% of registered NPOs in South Africa are non-compliant because they have failed to submit the required reports.
Reports can be submitted online or emailed directly to the National Department of Social Development’s NPO Directorate at NPOReports1@dsd.gov.za.
The Western Cape NPO Help Desk
As part of the National Know Your NPO Status Campaign, NPOs are encouraged to use the Western Cape NPO Help Desk to determine their compliance status. The NPO Help Desk was established to assist with registration support, compliance status information and NPO training. It is important for all NPOs to practice good governance, transparency, and accountability to deliver the best possible service to our communities.
The Department provides training in the metro and rural areas of the Western Cape. We provide NPOs with registration assistance and the more needed compliance assistance to avoid deregistration. Find out more about the organisational capacity building training offered by the Western Cape NPO Help Desk.