The Non-profit organisations Act (the NPO Act) has repealed the Fund-raising Act except for chapter 2 of the Fund-raising Act which deals with disaster and relief funds.

The NPo Act says an NPO is a trust, company or other association of people:

• Established for a public purpose, and
• The income and property are not distributed amongst its members or staff except to pay for a service

So, in terms of the Act, NPOs are civil society organisations (in other words, they are not part of government) that have self-governing boards which are accountable to their owners or members. To summarise, NPOs –

• Provide a public service or have some public purpose that goes beyond serving the personal interests of the members of the npo (such as the promotion of social welfare, economic development, religion, charity, education or research)
• May make a profit, but may not give any of the profits to its members – they can use the profits they make for the work of the organisation
• Often have to fund-raise from donors because they don’t make enough money (income) to cover their expenses

The NPo Act encourages organisations to register as NPOs with the Department of Social Development. Organisations can benefit from being registered because it formalises the institution and in this way makes them more credible to donors and to the public. There are also certain benefits from government for organisations that register. However, it is not compulsory to register as an NPO in order to exist. Registration is a choice but in the long run it will benefit the organisation.

(See: Resources: NPO Registration)

The Act aims to meet these objectives by allowing organisations to register with the Directorate of the Department of Social Development. This is called voluntary registration.