South African Non-Profit Types

Posted on July 6, 2019 at 18:45 PM

NPO Types

The definition of a non-profit as described on a CIPC web page at the time of writing is as follows; “A non-profit company is a company incorporated for public benefit or other object relating to one or more cultural or social activities, or communal or group interest.” [1]

Another explanation taken from the Western Cape Government website states; “An NPO can be a trust, a company or organisation, which has a public rather than a private purpose. This means that your NPO will not operate for profit but provide services.” [2]

Finally, a description in an article by EntrepreneurMag suggests that; “The non-profit corporation exists solely to provide programs and services that are of public benefit such as the promotion of social welfare, economic development, religion, charity, education or research. Earnings may not benefit individuals or stake-holders. It is known as a Section 21 company.” [3]

Now that the definition of what constitutes a non-profit has been laid out, we continue with this blog to provide clarity on distinct differences between the non-profit types within the South African (SA) context. Below are the various non-profit types with a brief description.

Community Based Organisation (CBO)

Organisations that are created by “the locals for the locals” i.e. depends on the local community to solve their own problems without the need for external groups/individuals. They may receive funding from various sources.

Faith Based Organisation (FBO)

NPO’s associated with religion or religious beliefs. These NPO’s are often involved in human rights initiatives, as well as political and social issues to name a few.

Non-Profit Organisation (also referred to NPC)

Organisations that are not community driven but are created by groups or individuals who identifies a social need (within a country) and creates e.g. projects that could be used to attend to the needs. Three types of NPO’s exist, namely;

  • Non-Profit Organisation (NPO) – requires at least 3 members and has a low governance requirement.
  • Non-Profit Company (NPC) – registered with the Companies and Intellectual Property Commission (CIPC), requiring a minimum of 3 members and has a high governance requirement.
  • Trust – most dissimilar of the 3, requiring 1 or more members, low governance requirement and is registered at a Magistrates Court.

Non-Governmental Organisation (NGO)

In SA, NGO’s and NPO’s are used interchangeably, however, there are subtle differences. NGO’s are non-governmental, i.e. they are not affiliated with government or its departments, whereas NPO’s (whom largely are non-governmental as well) might receive a governmental mandate. NGO’s may receive government funding.

International Aid Organisation (IAO)

These organisations focus on broad scale (usually international) problems, with emphasis on resolving global issues. They work with most stakeholders which includes NPO’s, FBO’s, CBO’s, NGO’s, governments, and private sector. Created by governments or private institutions.

REFERENCES

[1] How to register a non-profit company, http://www.cipc.co.za/index.php/register-your-business/companies/register-non-profit-company/ [Accessed: 01 April 2018].

[2] Non-profit organisations: registration and funding, https://www.westerncape.gov.za/service/non-profit-organisations-registration-and-funding [Accessed: 02 April 2018].

[3] I would like to register an NPO. What should I know before I do? https://www.entrepreneurmag.co.za/ask-entrepreneur/doing-business-in-sa-ask-entrepreneur/i-would-like-to-register-an-npo-what-should-i-know-before-i-do/ [Accessed: 02 April 2018].

Categories