Article by listed accountant BAKANI NGULANI
2015 saw the unearthing of over 50 000 Non-Profit Organisations (NPOs) who faced de-registration due to non-compliance with the Republic’s requirements set by the Department of Social Development. This would have greatly crippled a vital sector of the nation as NPOs include social and educational organisations such as churches and pre-schools.
Surprisingly, many of these NPOs were not aware of their status let alone the fact that they had to report to certain governing bodies. By law, all NPOs are required to be registered with the Department of Social Development and obtain an NPO certificate and accompanying registration number. After so doing, the NPO is required to submit a report of it’s activities as well as annual financial statements prepared by an accounting officer with relevant qualifications… this is the crux of this article.
By virtue of NPO operations, funds obtained are used to drive core activities and leave little to none available for issues such as administration and compliance. Consequently, NPOs cannot afford basic bookkeeping, accounting and taxation services as they often come costly. To fill this gap requires a competent accounting officer willing to settle for less economically but conduct his duties with the community at heart. This business concept is growing widely beyond our borders and has been duped “social entrepreneurship” which is defined as “the attempt to draw upon business techniques to find solutions to social problems”.
Social entrepreneurship may be categorized into three categories namely Leveraged non-profit ventures, Hybrid non-profit and Social business ventures; with the last being the most relevant to this discussion. In Social business ventures; the entrepreneur sets up a for-profit entity or business to provide a social or ecological product or service. While profits are ideally generated, the main aim is not to maximize financial returns for shareholders but to grow the social venture and reach more people in need. Wealth accumulation is not a priority and profits are reinvested in the enterprise to fund expansion.
BN Business Solutions (Pty) Ltd; an accounting firm led by Bakani Ngulani then set up a division called “NPO Compliance” to cater for NPO Compliance issues based on the social business venture model of social entrepreneurship. To date, NPO Compliance has done low cost accounting work for over 20 NPOs and does accounting work for 5 NPOs across Gauteng for free.
NPOs requiring assistance with compliance issues with the Department of Social Development or South African Revenue Authority may contact NPO Compliance by emailing info@bnsolutions.co.za or calling 083 799 9261 for further details.
“Business should get to a point where one understands that his livelihood is based on the community and give back to the community in one form or another. Business performance should not be measured by the bottom line i.e. profits alone, it should be measured by what affected that bottom line.” – B. Ngulani 2016
