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The Non-Profit Perspective

Understanding the Non-Profit structure in South Africa

NPOs come in all shapes and sizes and range from large scale entities to small gatherings of community supporters. In amongst this range of organisations, all operating to serve the social good, there are a number of classifications that subtly affect the direction and process of each particular entity. Under the banner of Non for Profit Organisations we have the options of voluntary associations, trusts or companies. Each of these have slightly different protocols and modus operandi but fundamentally serve to provide benefit to society.
A Voluntary Association

When we generally talk of NPOs in the South African context we are usually referring to a Voluntary Association of some nature that has registered with the Department of Social Development (DSD). These are the cheapest and easiest form of organisation to setup and requires the least paperwork to establish. This is part of the reason that the vast majority of NPOs are registered in this fashion. A Voluntary Association is the standard vehicle for community and faith-based organisations. The problem is that these organisations struggle to adopt any forms of business integration. This is to say that setting up bank accounts, initiating entrepreneurial efforts and developing fundamental sustainability policies can be substantially trickier than if registered as a company.
Definition helps to focus our efforts...
A Non-Profit Company

So enters the NPC, the Non-Profit Company. When we talk about business in the non-profit sense it usually refers to social entrepreneurship. An NPC is one of the available, and preferred, vehicles through which to engage in social enterprise. An NPC by nature is setup to operate much like a business, but with clear social objectives outlined within its Memorandum of Incorporation (MOI). This makes sense from a social entrepreneurship perspective where the organisation can apply basic business principles to ensure the sustainability of the entity and its social projects going forward. The important thing to remember about an NPC is that it must still strictly adhere to putting the social objectives first, ensuring that the organisation stays true to its mission and avoids the allure of for-profit business. This makes it a highly appealing vehicle for social enterprise that provides both the freedom and the transparency of both worlds. An NPC must register with the Companies and Intellectual Property Commission (CIPC). This is another aspect that makes an NPC a powerful social vehicle because the CIPC holds a high level of credibility due to its structure and regulatory framework, meaning that funders and particularly investors would be more enticed and of a higher standard…

A Public Benefit Organisation

Finally we have the Public Benefit Organisation (PBO). The interesting thing about a PBO is that both a Voluntary Association and an NPC can apply for said status. Through registration with SARS an organisation can ease the burden of tax they experience as well as provide deductions to donor tax liability. This means that through section 18 of the Income Tax Act certain donations may be exempt from tax and deductible from the overall tax obligations incurred by the entity donating. Essentially donors get tax breaks if they give to established PBOs. Whilst this may seem appealing, especially to the Voluntary Associations and similar NPOs, from the social enterprise perspective there are some limiting factors. The primary limitation to a PBO is that it requires organisations to strictly adhere to certain requirements, the most pertinent of these is that all of the organisations resources (assets and income) must be then applied toward the non-profit objectives it has laid out. Whilst this sounds like an admirable goal it excludes much of the interaction with outside sustainability projects which can be a crucial part of most social enterprises. Essentially it prohibits excess business from happening, despite that this might be used to fund and sustain the aforementioned non-profit objectives. For an NPC then, especially one looking to develop a sustainable project, a PBO status may hamper more than help.

Overall the choice of which vehicle to utilise comes down to strategy. Where do we want to be in 5 years? When and how do we want to help the community? And will we allow ourselves the freedom to grow our impact?
How will we impact the world?
The Power of Networking

Networking is fundamentally a form of marketing. When we network, we are marketing ourselves, our organisation and of course the missions and morals we stand by. This makes it a comprehensive experience and one that can nurture trust and enthusiasm for any cause.

Perhaps if we were to think of Networking as the creation of a web, across which we could find access to all forms of support and guidance. This makes it immediately clear that we would want to grow this web as large as possible. Not only this we would also want to ensure that the links between each point on the web are solid and reliable, capable of supporting the weight we require of them. This is why networking is so powerful, because a web like this enables access and capability across the board, and as far as we can stretch it.
Being Part of the Web

Of course, in order for the network, and this web metaphor, to effectively work, we need to all actively participate. We are all connected in some way within the community and as we network this becomes even clearer, and so too our responsibility as part of it. In order to maintain the power of networking we must each put ourselves forward and truly share the capabilities and resources we can. The more open and transparent we can make our networks, the more strength they will have, able to sustain substantial growth and progress.

How do we Start?
The first step, and perhaps every step, is to network. From there we can all try and be more transparent about ourselves and more trusting of others. We can strive to offer as much as we receive and share as much as we take. Because at the end of the day we are all trying to make things better, and that can never really be a bad thing.

Additionally, and in a more practical sense, we can also look to attend more networking meetings and similar. For instance there is our very own NGO Assist Networking Breakfast that happens on the last Thursday of every month and should in fact be happening as we send this out… So if you’ve missed it we hope to see you there next time, because by now we all understand the power networking has to offer.
When we join networks,
we open up all sorts of possibility...
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Developing a Call to Action Roadmap

We have covered social media marketing extensively in past newsletters and addressed some of the many factors that are involved. However as we mention the likes of Networking and more it becomes even more crucial that we remember the primary purpose of a lot of these tools. This purpose to generate support for our organisation’s mission.

By spreading awareness, showing members of our community how they can help and inviting them to do so. This is fundamentally what tools like marketing and networking do and this is important to remember because a lot of the time there is a sequence or cycle to this process. In ordinary business terms this is known as a buying cycle or buyer’s journey. In that case customers go from awareness to consideration and then from there to purchase. However, in the social sector our ‘customers’ are both the group that support us and the group we support. We are tasked with leading both down a journey until they feel comfortable enough to support us or trust our support. It is certainly not an easy task and largely why we have so many tools available to help. It is also why we must keep track of this process and realise when it is time to nurture and when it is time to reap, to use rather callous terminology. We must fulfil the journey because it is the end result that we are after, the end result that our community requires.
Call to Actions come in all shapes and sizes...

In Practical Terms

How do we look to do this in a more practical manner? We must develop a strategic approach to our actions, all of them. We must realise how they tie into one another and even more importantly we must know when to call to action. Asking for trust too early breaks it, too late and anything earned is forgotten. One rather straightforward way of negotiating this sort of support journey is by being as transparent as possible and simply asking the audience. By providing channels that anyone can follow, through social media or a website for example, anyone can identify their next step. If they want to know more there is content available, if they want to hear opinion there are comments and if they want to show support there are calls to action. In networking this whole journey needs to take place to the extent that we can ask for a degree of call to action by the end of it.

These simple steps are essentially the conjunctions that join sentences together and allow us to extend our efforts to impossible and indefinite lengths.
Sign Up for the NGO Assist Networking Breakfast
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